Managed Futures Fund

(11-01-2011, 04:40 PM)wj888 Wrote: BTW, I don't understand. You are already donig quite well with your portfolio, why do you want to outsource some of the funds out to other people?

Thanks for your information. I'm not too good with Funds and Unit Trusts, which is why I invited comments and opinions.

Even though my portfolio is doing decently, I think I'd be hard pressed to beat 11.7% per annum for 10 years compounded (assuming it's true, of course). This was why I considered exploring such Funds. No obligations, of course, and I am still in the info-gathering stage.

yeokiwi, thanks for the link, haha didn't know FSM had it!

If you manage your own money, you know the company and the risk. Worst case, you learn how the company do business.

If you put your money into the black box, what the hell do you know.

I am not one super-rich who can easily take out $1M (maybe 5% of net-worth) and put the money into something with unlimited risk (because you don't know what's happening, risk is unlimited. In fact you may need to fork out additional $ to service the margin calls)

(11-01-2011, 05:17 PM)mrEngineer Wrote: If you manage your own money, you know the company and the risk. Worst case, you learn how the company do business.

If you put your money into the black box, what the hell do you know.

I am not one super-rich who can easily take out $1M (maybe 5% of net-worth) and put the money into something with unlimited risk (because you don't know what's happening, risk is unlimited. In fact you may need to fork out additional $ to service the margin calls)

Agreed...

I started looking at investment in year 2007/2008..

I had worked for about 1 yr and finally paid off my tuition fee loan from banks and I was looking to invest via CPF since I only had some money in CPF then..

I was not happy with the poor returns of 2.5% per annum for CPF so I took up my insurance friend's advice to invest in this CPFIS funds etc..

Fast forward to today...

All my investments in these funds are still in the RED and on top of that, I have to pay management fee through the deductions of the units held in the funds...

Everything depends on point of entry and exit..

With funds or unit trust, you cannot plan your entry or exit...
And the bid ask spread of the funds is huge...

I suggest you forget about funds unless you are going to invest in some exotic countries like Brazil, Russia, etc where it is virtually impossible or tough to invest in those areas yourself...

MW, you are already very good in your investment and analysis..
In fact, I visit your blogs frequently..
You will definitely go far in your investments...
Forget about that fund...

If you wanna buy funds.. buy ETF instead..

Thanks Zelphon for your kind words. Compared to some of the veterans in this forum with many years (or shall I say decades) of investing experience, my performance can be considered mediocre at best.

I shall not consider this Fund for now, as I do not understand Managed Futures and my motto is to not invest in something which I do not understand.

Thanks all once again for the views. Appreciate them!

I remember my first encounter with funds , it was the new economy fund that I bought from Ocbc . Wow the graph also v fantastic , keep going up . Invest in new economy company v sexy like dot com and telecom companies . I bought about 5 k worth and less than 1 year it dropped to less than half it's original value.
From then on I swore of funds. The only people who r rich r the fund managers not You . They r the one who feeds on yr money and drive the BMW while we continue dreaming of driving one . Haha.
My next encounter was my so call rm introducing some fund that pay u 8% per annum for 3 years which was link to the worst performance of the nikkei, euro exchange and s&p . As long as 1 of the worst market hits 20% down, u will get him . That was just before the financial crisis hit. He told me that most market only correct 10%, just put a small sum in should not be a problem. Oh Yeager he show me many nice graphs and statistics. What rubbish, if I listen to him I would have easily surrendered my hard earn money.
I have also been telling my parents not to buy anything from the bank,unfortunately they were coaxed by their rm to buy the high 5 notes from DBS , and it looks like it is unlikely to recover anything back
Just sharing my experience

Same here. Never trust the fund. Only fund manager sure earn. My father 70 coax into xxx fund from a big local bank only left 50% value even after economy recover. Sometimes I do not understand how RM can do such a thing.

There seems to be a lack of social responsibility on the seller. I will be very interested to see how they face their God one day. To me is just short of swindler done in a legal way. I never trust the banks since then.

Only FD allowed for my parent now.

AHL is part of FTSE-listed Man Group and manages about US$21b in assets. It has a 22 year track record. So it is not a fly-by-night shop.

However, at US$21b of AUM it is clearly an asset-gathering shop, not an alpha-generating shop. The fees say everything: the Man AHL Trend Fund in question charges a 3% management fee plus a 20% performance fee. It's a great business model. In fact during a crisis one should consider investing in Man Group, rather than the Man funds!

As to the fund itself, it is a managed futures fund. Typically, such a fund will keep a large part of the fund in cash (the prospectus says up to 49%) and the rest is used to trade in futures. The high leverage afforded by futures results in very high volatility, which is offset by the large cash position.

The fund is a "trend following" fund which is to say that it buys and sells based on the idea that what just went up will continue going up, and what just went down will continue going down. This of course only works until the trend changes direction, at which point the strategy loses money until the computer figures out that it should reverse the positions.

The difficulty is figuring out when to ignore the volatility and when to follow it. If it is too sensitive it will constantly change course and get hit with small losses. If it is not sensitive enough it can incur large losses when trends reverse.

Trend following strategies can make very large profits when the directional trend is obvious. So they can make money in both bull and bear markets. But at the point when the trends reverse, they often incur large losses until the algorithm changes direction. If there is no clear trend, the strategies don't work, and many algorithms will simply stay out of the markets. To avoid this problem, most trend following funds will span multiple asset classes, from stocks to bonds to commodities to interest rates to forex. Usually there is a market somewhere that has a discernable trend, and that's where the fund will go to play.

Over the long term, the better-known trend following funds have produced IRRs in the low teens, with low correlations to most other asset classes. The good returns and low correlations make them attractive to investors who want to minimize their overall portfolio volatility, since low correlation implies that these funds might do well even when everything else is not.

However it has to be understood that low correlations mean that the funds could also lose money when everything else is doing well. For example I get the monthly info of another managed futures fund run by someone else. That fund compounded at 12.9% per year over the last 15 years, very good. But in 2010 it lost money! Is the manager stupid? No - it's the low correlation at work.

Haha to me it sounds like highly leveraged tikam . I wont be surprise if Normally u make outsize performance until one day kaboom algo doesn't work and fund get chop by half.

Interesting. So it is better than equity based funds in a way. Perhaps some may be worthwhile to put money into, maybe for the short term(1-2 years)?

Based on the chart alone, recovery to the previous peak in 2008 was the longest since inception.

The question I will ask is in the first place why now decide to open to public? Is it possible due to heavy withdrawal of funds from the accredited investors?