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USD15.2bn flows into managed futures in Q3

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Although managed futures lost 0.77 per cent in October assets under management have increased significantly in recent months, according to the Barclay CTA Index compiled by BarclayHedge.

“Even though the Barclay CTA Index is down 0.66 per cent in 2009, assets under management in managed futures investments increased by USD15.2bn in the third quarter of 2009, to USD212.6bn,” says Sol Waksman, founder and president of BarclayHedge.

“In spite of recent lacklustre performance by CTAs, investors have been quietly coming back to managed futures.”

Industry assets under management peaked at USD234.1bn at the end of the second quarter of 2008.

Despite the stellar performance of managed futures during last year’s meltdown in financial markets – the Barclay CTA Index gained 14.09 per cent in 2008 – assets flowed out as investors rushed to raise cash. Industry assets had declined to USD196.3bn by the end of the first quarter of 2009.

“Now that investor confidence is returning, it seems that some of the money that was hastily withdrawn last year is starting to come back,” says Waksman. “Although the recent performance has been below par, investors who understand and value the long term benefits of exposure to the managed futures sector are returning.”

Seven of Barclay’s eight managed futures indices had negative returns in October. The Diversified Traders Index fell 1.61 per cent, systematic traders gave back 1.27 per cent, and agricultural traders were down 1.16 per cent.

The only positive note in October was a gain of 0.19 per cent in the Barclay Currency Traders Index.

Year-to-date, currency traders are up 0.87 per cent, and discretionary traders have gained 0.41 per cent. On the negative side, diversified traders have lost 4.34 percent, and systematic traders are down 3.48 percent year-to-date.

“The only consistent trend during October was continuing US Dollar weakness,” says Waksman. “In the energy complex, gasoline was sharply up while natural gas was sharply down. In other commodities, cotton markets rose and sugar retreated.”

The Barclay BTOP50 Index, which monitors performance of the largest traders, lost 1.31 per cent in October, and is down 3.16 per cent in 2009.

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