Tag Archives: gsg

(Non)-Correlated November

Depending on your perspective, November proved to be a rather correlated or non-correlated month. U.S. stocks and Managed Futures are the only two asset classes we track with positive results in November (likely from unique return drivers), while Long-Only Commodities continues to plummet, and Managed Futures is positive on the year. Those that know that Managed Futures can find return drives when the markets are moving up, down, and from various different sectors won’t be surprised to see that it was also able to make a +2.84% gain, when the iShares S&P GSCI Commodity-Indexed Trust ETF (NYSEARCA: GSG ) had another big downward move in November, down -9.03%, bringing the YTD performance to -27.34% (Disclaimer: Past performance is not necessarily indicative of future results) . As FT Alphaville points out, this is the 5th-worst November the index has ever had. Believe it or not, November 2014 was worse, as was its full-calendar year performance . As for the actual return drivers from Managed Futures in November, a trending dollar is Managed Futures’ friend . Many are speculating that if the Fed decides to raise interest rates, it could push the dollar higher, and in doing so, could give Managed Futures that extra help before the year draws to a close. Many are waiting to see what happens to the markets in December, pending the Fed decision. It will be a nail-biter to the end. (click to enlarge) (Disclaimer: past performance is not necessarily indicative of future results.) Source: All ETF performance data from Morningstar Source: Managed Futures = Newedge CTA Index, Cash = 13-week T-Bill rate Bonds = Vanguard Total Bond Market ETF (NYSEARCA: BND ) Hedge Funds= IQ Hedge Multi-Strategy Tracker ETF (NYSEARCA: QAI ) Commodities = iShares S&P GSCI Commodity-Indexed Trust ETF ( GSG ) Real Estate = iShares U.S. Real Estate ETF (NYSEARCA: IYR ) World Stocks = iShares MSCI ACWI ex-U.S. Index ETF (NASDAQ: ACWX ) US Stocks = SPDR S&P 500 Trust ETF (NYSEARCA: SPY )

Asset Class Scoreboard – Eli Manning Edition

Coming into the month of October, the Asset Class Scoreboard was looking brutal , with six of the eight asset classes we track in the red on the year. We mentioned it was time for the star of the portfolio to show up the last three months of the year, and it seems like they heard us… Seven of the eight asset classes in October recorded positive numbers in October, with Managed Futures the only asset class in the negative, down -0.86% on the month. Stocks, World Stocks, and Real Estate all recorded 6%+ returns for the month on the heels off the Fed deciding not to raise rates in 2015 (although now there’s talk of December being back in play). But we can’t help but wonder if October’s great numbers are a little bit like the Manning brothers in action on Monday, where Eli Manning was the first QB in NFL history to throw six touchdowns, no interceptions, and still lose the game . Are these October returns just a few touchdown passes on the way to a losing game (the year) or are they the start of a comeback? It feels like the back and forth of that Giants/Saints game, where Eli had to score 6 touchdowns, because the other guy had 5 already. On the investment side, you have to have big returns just to make up for those poor ones a few months ago. This is what volatility looks like in real life – scoring a touchdown/giving up a touchdown, winning/losing, winning again, losing again. October was just the start of the fourth quarter… we’ll see who has the ball last in this game and wins the year. (click to enlarge) (Disclaimer: Past performance is not necessarily indicative of future results.) Source: All ETF performance data from Morningstar.com . Sources: Managed Futures = Newedge CTA Index, Cash = 13 week T-Bill rate, Bonds = Vanguard Total Bond Market ETF (NYSEARCA: BND ), Hedge Funds = IQ Hedge Multi-Strategy (NYSEARCA: QAI ) Commodities = iShares GSCI ETF (NYSEARCA: GSG ), Real Estate = iShares DJ Real Estate ETF (NYSEARCA: IYR ), World Stocks = iShares MSCI ACWI ex US Index Fund ETF (NASDAQ: ACWX ), US Stocks = SPDR S&P 500 ETF (NYSEARCA: SPY ).

Asset Class Scoreboard Entering The Final Quarter

We’re entering the final quarter of 2015, and if we take the sports analogy a little further – it’s time for the star of your portfolio to show up if there’s any hope of winning the game. Because no matter the make up of your team in 2015, you’re likely losing through three quarters, with every asset class besides bonds and cash in the red and in need of a 4th quarter comeback. As for alternatives – managed futures are just barely in the red, but red nonetheless, while hedge funds are down for the year, but better than stocks themselves. (Disclaimer: Past performance is not necessarily indicative of future results) Notes: No asset class has been up double digits at any point on the year. Commodities are down by more than -20% for the year. World stocks are down about -17% from their 2015 highs (ouch). World stocks have had five consecutive months of negative returns (Hedge Funds 4). Bonds are at the top of the scoreboard only up 1.01%. For as many articles there have been about the end of the bull market, U.S. stocks are only down -31% on the year. We’re seeing less articles about hedge funds underperforming stocks (because they’re beating them!). Finally, a look at how each asset class performed YTD of every month in 2015 thus far. (click to enlarge) (Disclaimer: past performance is not necessarily indicative of future results.) Source: All ETF performance data from Morningstar.com Sources: Managed Futures = Newedge CTA Index, Cash = 13 week T-Bill rate, Bonds = Vanguard Total Bond Market ETF (NYSEARCA: BND ), Hedge Funds = IQ Hedge Multi-Strategy (NYSEARCA: QAI ) Commodities = iShares GSCI ETF (NYSEARCA: GSG ); Real Estate = iShares DJ Real Estate ETF (NYSEARCA: IYR ); World Stocks = iShares MSCI ACWI ex US Index Fund ETF (NASDAQ: ACWX ); US Stocks = SPDR S&P 500 ETF (NYSEARCA: SPY ) Share this article with a colleague