A recent article on the Street.com discussed the absolute return mutual funds that have been able to perform well in this market environment. The author, Roger Nusbaum, mentioned the Rydex Managed Futures Fund:

“The Rydex Managed Futures Fund is a rules-based product that goes long or short physical commodities such as energy (long or flat oil, never short), metals and agricultural commodities and also long or short financial futures like currencies and Treasuries. Long or short depends on the relative strength of each underlying commodity or financial product.” (Read Full Article)

While the Rydex Managed Futures fund is the first managed futures mutual fund available for investors, it only represents the systematic trend following strategy of the managed futures universe. While the argument for systematic trendfollowers is often that they can profit both in up and down markets, it is important to point out that trendfollowing managers will offer incur declines in choppy or sideways market conditions.

Thus, while the markets have had major( up and down) trends during the past year, it should be noted that many trendfollowers have suffered major drawdowns during sideways or choppy markets.

So the question becomes…Will Rydex( or other mutual fund companies) come out with a suite of managed futures mutual funds that will encompass a wider array of strategies and markets?  Only time will tell. But I would imagine the success of this current fund will spur on additional mutual funds that will focus on the managed futures industry.

In the meanwhile, Balarie Capital Management continues to offer investors access to a wide variety of Commodity Trading Advisors who implement a wide variety of trading strategies and who trade different markets.  Please contact us or access our managed futures database for more information. Also, if you are interested in learning more about managed futures, please request our free managed futures brochure.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.  THERE IS SIGNIFICANT RISK OF LOSS WHEN TRADING FUTURES AND OPTIONS. ALWAYS REVIEW A DISCLOSURE DOCUMENT BEFORE INVESTING IN ANY MANAGED FUTURES PROGRAM.