We have previously discussed how the “financialization of commodities” has changed the risk-reward equation for commodity futures.  Now it seems that the surge of assets into managed futures has done the very same thing.  After a strong 2008 managed futures have struggled since then.  So much so that some managers are looking at mean-reversion or longer term plays in the futures markets.  In short, managed futures managers may have lost their edge.  The ongoing challenge for investors is to recognize when their edge has been reduced or eliminated altogether.  In today’s screencast another look at managed futures.

Items mentioned in the above screencast:

Has the trend-following managed futures trade become too crowded?  (FT, Institutional Investor)

Investors need to recognize when circumstances have changed and they therefore no longer have an edge.  (The Reformed Broker)

A daily price chart of the WisdomTree Managed Futures Strategy Fund ($WDTI).  (Finviz)


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