Perfect Time to Consider Clarke Capital Worldwide

In recent newsletters, we’ve  talked a lot about what success means in managed futures. Our conclusion was that success includes drawdowns, with managed futures usually moving in a sort of ‘three steps forward/two steps back’ type of pattern. After all- what goes up must come down some (unless your name is Bernie Madoff). While most investors cringe at the idea of investing in a program that isn’t performing well at the moment, it’s during those times that we get excited.

The way we see it, if performance is relatively cyclical (with run-ups followed by drawdowns, followed by run ups, and so on), the drawdown period is where you can get the biggest potential upside (for a more technical explanation, see here).  Many of our clients have us scan our expanded watch list of CTAs looking for an opportune time to enter into a solid program in a drawdown – and one such opportunity is upon us now with Clarke Capital’s Worldwide program.

Based on our estimates, the Clarke program is currently in the midst of an intramonth drawdown of -23.64% (down approximately -11% in May) from the November 3, 2010 high. Compared to their max end of month drawdown of -26.06%, this looks like an attractive entry point to us in anticipation of a reversion to the mean in their performance.

The program has history going back to 1993 (under the name Domestic Diversified),  when the models were first developed for US markets, and in 1996, it began to include international markets, earning it its current name.  Throughout its history, the program has had its fair share of ups and downs, but has continued to excel during the good times (past performance is not necessarily indicative of future results).

For those investors looking to break the costly ‘in at the top/out at the bottom’ cycle (or for those lucky few who already understand the power of looking to ‘get in at the bottom/out at the top’), the current entry point for Clarke Capital Worldwide looks to be a great opportunity.










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DISCLAIMER

Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.

The entries on this blog are intended to further subscribers understanding, education, and – at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex, and is not intended as investment advice, or an offer or solicitation for the purchase or sale of any financial instrument. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.

*The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship and self reporting biases, and instant history.

The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on Attain’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by Attain, and averaging of various indices designed to track said asset classes.

It should be noted that past market performance is not indicative of future market movement.No market data or other information is warranted by Attain Capital Management as to completeness or accuracy, express or implied, and is subject to change without notice.

Managed Futures Disclaimer:

Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.