Some Words From Winton Capital’s David Harding
Winton’s David Harding On HFT, CTAs, And QE Attain: You’ve recently been quoted saying “don’t call us an F*^%$ CTA…”, yet Winton makes up approximately 8% of BarclayHedge’s reported $325 Billion in Managed Futures Industry AUM. How much, if any, of Winton’s $24.4 Billion in AUM should be counted as Managed Futures industry assets in your opinion? Just the Winton Futures Fund? And a quick follow-up, do you think Dalio’s Bridgewater should be included in the managed futures AUM number?
**JK – Why yes, he is an F-ing CTA.
Barclay CTA Index Gains 0.87% in May
Managed futures gained 0.87% in May according to the Barclay CTA Index compiled by BarclayHedge. The Index is now up 0.21% in 2014.
***DA: Going in the right direction, at least.
Managed-Futures Funds Still Popular
The funds, many of which attempt to follow market trends by investing in futures, swaps, options and other contracts whose values are tied to the movement of various markets or indicators, including interest rates, stock indices, commodities or currencies, have shed 5.7% on average over 12 months and an annualized 2.4% over five years through Monday, according to Morningstar. In contrast, the S&P 500 index has gained 15.4% and 18.2% in those periods, respectively.
***DA: Near-term returns are only one factor when deciding how/where to allocate.
Hedge-Fund Hack Part of Bigger Siege: Cyber-Experts
Chris Strohm – Bloomberg
The attack on a U.S. hedge fund’s network, which a cybersecurity contractor said last week disrupted the firm’s high-speed trading and stole its data, is but one among many. That is the assessment of more than a half-dozen computer security experts, who in recent interviews characterized the hedge-fund industry as the target of multiple attacks, many successful.
***DA: The tremors just before the big one?
Commodity hedge funds out of favor, launches head for 8-year low
Commodity fund launches have slowed dramatically, heading for an eight-year low, data from industry tracker Preqin showed, after years of weak returns and some high-profile fund failures in the commodities sector.
***DA: The hot money has moved on.
Typhon Access launches Hydra Platform, all internal Typhon Capital strategies positive in May
Typhon has a wealth of experience operating multiple investment vehicles, and we are excited to announce that the Hydra Platform—a platform solution to allow managers and customers to easily find each other while providing proper checks and balances—launched in May.
***DA: I have the perfect name for it: BetaMetrix.
Blackstone plans its own investment platform
By Miles Johnson and Harriet Agnew – FT
Blackstone, the world’s largest allocator of capital to hedge funds, is preparing an overhaul of its $58bn fund of hedge funds unit that will see it compete directly with the managers in which it now invests.
NY judge rules regulator’s case against speed-trading firm DRW to proceed
By Casey Sullivan – Reuters
A lawsuit brought by the U.S. derivatives regulator against a Chicago speed-trading firm and its prominent founder claiming they manipulated prices may go forward, a New York federal judge ruled on Thursday.
Derivatives World China: The International Options Forum
16 September, Shangri-La, Dalian, China
With options set for launch in China this year, now is the time to find out how you can take advantage of this once in a lifetime opportunity to be there at the start of the market.
Join over 300 key figures from the global futures and options markets for high level discussions on the latest developments, opportunities, challenges and future direction of the options market in China and around the world.
To view the agenda, click HERE
To register for the event, click HERE
Winton doubles payout to bumper £197m
By Miles Johnson – FT
Winton, the London hedge fund founded by David Harding, paid its staff and partners £197m in dividends and salaries last year as its revenues rose sharply on improved investment performance.
Winton, a computer-driven hedge fund that has turned Cambridge-educated physicist Mr Harding into one of Britain’s richest men since he founded it in 1997, last year more than doubled its dividend payment to partners and shareholders to £105.7m, according to the company’s latest annual accounts.
China Metal Probe Weighs on Copper Outlook
Chuin-Wei Yap – Wall Street Journal
BEIJING—Hedge funds and other money managers are increasing their bets against copper, according to U.S. data, amplifying pressure on prices following allegations of fraudulent metal-backed financing in China.
***DA: A double whammy, considering if the spillover leads to recession in China, copper demand falls off the map.
Managed Futures/Managed Funds
Barclay Hedge Fund Index Adds 1.16% in May
Hedge funds gained 1.16% in May, according to the Barclay Hedge Fund Index compiled by BarclayHedge. The Index is up 2.35% after five months.
Hedge Fund Industry Surpasses $3 Trillion for First Time
Steven Russolillo – MoneyBeat – WSJ
The hedge-fund industry exceeded the $3 trillion barrier in May for the first time ever, according to one research firm, as new allocations and performance gains pushed total assets to a new record.
When a ‘Liquid-Alt’ Fund Loses Steam
Jason Zweig – MoneyBeat – WSJ
If you trade up for a “liquid-alternative” fund, make sure you understand you also are making a trade-off. That is the lesson that emerges from the rise and fall of the Natixis Diversifying Strategies Fund, a pioneering portfolio that has just been put out of its misery by its manager.
***DA: A mercy killing, from what I hear.
Be wary of ‘new and improved’ mutual funds
Walking through the exhibit hall at the recent Morningstar Investor Conference felt a bit like watching a marathon of a financial version of The Dr. Oz Show, filled with fantastic claims about miracle products designed to improve your financial health.
***DA: All my funds are fully krausened.
AIMA Signs MoU With China Hedge Fund Industry
Global hedge fund industry association, AIMA, has signed a Memorandum of Understanding (MoU) with AMAC, the Asset Management Association of China.
**JK – There must be a Chinese proverb about good luck and MOUs since every Chinese entity seems to sign one.
BlackRock launches first UK tax transparent fund
Andrew Pearce – Financial News
BlackRock has become the first asset manager to respond to taxation changes designed to encourage more funds to domicile in the UK. The world’s largest fund manager launched the UK’s first Tax Transparent Fund on June 27.
EU trade body members face fee rise
Joe McGrath – Financial News
The European Fund & Asset Management Association, the overall trade body for investment managers across Europe, is to debate increasing membership fees over the coming year because of an increase in international regulation and a need for more lobbying.
Blackstone To Launch New Hedge Fund
Hedge fund investor Blackstone is preparing to launch a new hedge fund that will make “make big, bold bets”, according to a report by The Wall Street Journal.
Pensions & Institutions
Big Investors Missed Stock Rally
Corporate pension funds and university endowments in the U.S. have missed out on much of the rally for stocks since 2009, following a push to diversify into other investments that have had disappointing performances.
***DA: Hurry! Get all your eggs back into the same basket!
Chile’s Bachelet Pushes Pension Reform, Threatening Private Funds
Swiss Consider More Payment Transparency for Commodity Traders
By Andy Hoffman – Bloomberg
Switzerland is considering regulations that may require the country’s $21 billion commodity trading industry to disclose payments to foreign governments.
The measures would only take effect if similar rules for commodities traders are adopted by the European Union and the U.S.
***DA: The Swiss are known for their commitment to transparency. They even put holes in their cheese so you can see through it.
Harvard Seeks Fund Chief for the Long Haul
After the surprise announcement earlier this month that its chief executive is stepping down, Harvard University’s $33 billion endowment is searching for a replacement willing to sign on for the long term, according to a person familiar with the matter.
Pension Fund Governance: Avoid the bear traps
The UK is a divided market for pension funds and while many argue it is well-regulated, others say it is overly restrictive. In truth, both sides are right. The regulations put in place since Pensions Act 1995, the regulatory response to fraud at the Mirror Group pension fund following the death of Robert Maxwell in 1991, have succeeded in averting further scandals but have arguably hastened the demise of defined benefit (DB) schemes.
CFTC extends comment period for position limits for physical commodity derivatives and aggregation
The US Commodity Futures Trading Commission (CFTC) has submitted for publication in the Federal Register a 30-day extension of the comment period for two rulemakings on position limits and aggregation of positions.
***DA: The new rule is designed not only to protect from
Global Watchdogs to Re-Examine Systemic Risk in Fund Industry
Sarah Krouse – MoneyBeat – WSJ
Two global watchdogs plan to work together to evaluate the risks caused by asset managers, the latest development in a controversial process to determine whether the sector poses a threat to the financial system.
“Thousands of firms” could quit EU trading
William Mitting – FOW
Provisions within Mifid II to regulate direct electronic access could result in thousands of non-EU firms ceasing trading on European derivatives markets. The European regulator Esma is currently consulting on the technical standards that will form the basis of the implementation of the Markets in Financial Instruments Directive or Mifid II.
House Passes Hedging Deregulation Bill
The U.S. House of Representatives yesterday passed legislation that would significantly weaken elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act put into place by Obama in 2010. The bill passed by a vote of 265-143.
German regulator warns Deutsche Bank on commodity trading
Alice Ross in Frankfurt – Financial Times
Germany’s financial watchdog has ordered Deutsche Bank to do more to ensure that commodity prices cannot be manipulated by its traders, in the latest sign that authorities believe some of the world’s largest financial markets are still open to abuse.