Musings from the Chicago CTA Expo

The who’s who of the CTA world gathered at the UBS Tower in downtown Chicago this past Tuesday. The format allows for industry experts to give attendees a current state of the industry including everything from marketing to regulation. It also offers up a unique chance for asset allocators, like GPWM, to hear presentations from both emerging and established advisors.

The conference is always extremely well attended and this year was no different. Presenters ranged from Managed Futures author, Mark Melin, to NFL’s superstar, Ronnie Lott. In the main room I especially enjoyed Mark’s take on the investment opportunities of the future that only CTAs can take advantage of.

Mr. Melin put on a sobering presentation of the US debt situation and how Managed Futures might be the only chance an investor has at yield in such a volatile marketplace. CEO of Shinnecock Partners by far had the quote of the show, “Managed Futures is an excellent shock absorber for any portfolio.” I could not agree more.

I sat in on three separate CTA presentations that included Dominion Capital Management, Emil van Essen, and Clarke Capital Management. Risk management was the topic du jour after an incredibly volatile summer. I found the common theme was an expectation for continued volatility and a need for self examination of historical trading models.

Michael Clarke of Clarke Capital shared his insight on how a program, much like a market, can overshoot its average performance. These substantial deviations either positively or negatively should be analyzed as possible signs for the need to rebalance.

It was a great show and we will be doing a complete write up on each CTA we spoke with at the Expo. Expect the first one early next week accompanied with a trader interview. For now this west coast boy is heading home from the windy city with more insight into what makes Managed Futures such a valuable asset class.

 

Past performance is not indicative of future results. The risk of loss in trading commodity futures and options can be substantial no matter who is managing your money. There are substantial risks and conflicts of interests associated with managed futures accounts and you should only invest risk capital. Trading in commodity futures and options is not suitable for all investors. If you are unsure your financial circumstances permit you to invest you should seek professional advice.