Managed futures funds shined brightly in what was an otherwise brutal third quarter for investors. Duncan Wilkinson, CEO of AlphaSimplex Group, said the ability to go long and short – and not be dependent on stocks alone – were the keys to success. ‘Because this strategy has the ability to go long and short, it is not dependent on any asset class going up. Down markets can also be an opportunity to profit,’ said Wilkinson. ‘It is also focused not just on stocks, but bonds, rates, currencies and commodities.’ Wilkinson’s trend-following Natixis ASG Managed Futures Strategy (AMFAX) was up over 2% in the third quarter, which was consistent with the NewEdge trend index that is an equal weight of the largest trend following hedge funds. For comparison’s sake, the S&P 500 was down around 6.5% over the same period. Wilkinson said there is no clear trend right now in equities, and which makes him cautions around equity exposure. He said the equity market might continue to see these periods of ups and downs with no particular trend, which is a challenging environment for any investor. He added that this is in stark contrast to last year, where there was a solid trend in U.S. stocks that benefited investors who stuck with it.
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