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5 CTAs in a Drawdown Worth a Look

September 4, 2019

With the obvious exceptions of a flagpole and the y-axis, most things don’t go up in a straight line. Rockets, towers located in Pisa and, the growth of financial assets may rise but it doesn’t always happen perfectly and immediately. In the first two examples, a basic universal force acts against them, i.e. gravity. In the case of financial performance, another universal force is also at work: risk.

Risk is the price you pay for the returns you want. Risk is the guarantee; return is the potential. Acknowledging that is the first lesson we all learn, but it’s sometimes the hardest to internalize. How often are we tempted to jump ship at the first sight of a drawdown? After all, years of evolution naturally produce aversion to risk. But when it comes to evaluating CTAs and their current performance, investors who exclude managers in a drawdown potentially miss out good performance in their recovery.

With that in mind, here are five CTAs in a drawdown who we feel are worth keeping on your radar. To help you analyze, here are two quick definitions and a note:

Current Losing Streak – The amount a CTA’s performance is below the last equity high.
Worst Peak to Valley Drawdown – The worst drawdown or largest losing streak since the inception of a program.
* CTA that only manages accounts for investors who meet criteria of Qualified Eligible Person (QEP)

CTA NameCurrent Losing StreakWorst DrawdownWDD DatesCompound Annual ROR
Deep Field Capital Intraday Crisis Alpha*-5.48%-5.48%3/19 – 7/198.67%
Pearl Capital Hedged VIX*-10.36%-11.11%6/18 – 5/198.52%
M&R Capital Livestock-5.98%-23.38%8/15 – 1/1622.38%
Diamond Capital Enhanced S&P-0.36%-12.65%9/18 – 12/1812.57%
Blue Bar Futures Trading Prime Ag*-4.71%-42.26%1/15 – 3/1541.28%

Foremost, nor the CTAs have a crystal ball. Current drawdowns may turn into the worst drawdown, which may be a coming death knell. But for right now, we feel these drawdowns are within reason.

The next step is to call us for more information on why these lower than average returns are happening. In learning why, you may find some great opportunities!

Connect with a broker at 888-818-0880! Curious how this may apply to systems and autotraders we are familiar with, see our blog on the topic HERE.

Past performance is not necessarily indicative of future results.  View these CTAs and hundreds more in our database.

Categories: CTA Spotlight, Managed Futures
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