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CTA Spotlight: AG Capital Update – 2019

August 14, 2019

In February 2018 we wrote a blog on AG Capital Investments, LLC.  You can read it here: ag capital logo

We recently asked AG Capital Investments, LLC if they could give us a programmatic and performance update covering the Discretionary Global Macro program for 2019. This is what they had to share:

2019 YTD performance

The program has had a strong first half of 2019. Many of the same themes that went against us in 2018 have turned around and performed very well. Our thesis has been that investors have been under-pricing the extent to which central banks globally would need to ease policy in order to attempt to extend the economic cycle (in the case of the Fed), or address outright weakness (in the case of the European Central Bank (ECB) and the Bank of Japan). As such, we’ve maintained a healthy allocation to gold and to the Japanese yen, two assets that tend to strengthen as real interest rates — interest rates net of inflation — shrink. 

In addition, we were able to capture profits on commodity-specific trades where we identified a catalyst on a short-term basis. We shorted palladium, as demand for catalytic converters weakened due to slowing end demand for autos; we also made profits on a long corn position as the market priced in a premium due to the worst floods in the Midwest in a century. Of course not all trades worked out, and we took our share of small losses, including a loss on a long Euro position, as it became clear that the ECB would continue to match and even exceed the Fed’s dovishness. 

The 2019 YTD Rate of Return for the Discretionary Global Macro program is: 26.83%

The 2019 YTD Drawdown for the Discretionary Global Macro program is: -6.11% July 2019.

Past performance is not necessarily indicative of future results. The complete tear sheet for this program can be review HEREView these CTAs and hundreds more in our database.

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