In the last month the CTA strategies performed very well. One of our managers even delivered a +23% return over the last month. A long strike of weak months is ended by this. Besides, the core strategy of the fund, CTA’s, all other strategies performed well also. Even the US Dollar was at our side for the first time this year. All together it cumulated into a positive return of 5.4%. The combination of strategies should keep the downside risk controlled. Also the funds correlation to equity and bond markets is close to zero. This makes the fund a good diversification in every portfolio.
We are living in a period which some call the bubble of everything. By this is meant the high valuation of almost every asset class. Interest rates are around 0.0%, even high yield bonds are yielding below 4%. On the PE Shiller indicator, the equity markets are valued at absolute record level multiples. Real estate markets are back on or above the levels of 2007, even corrected for inflation. Private Equity is drenched in money, 1 trillion US dollar is collected and ready to invest. But it is all interest rate related. In case the inflation will come back, interest rates will increase, hence the house of cards can collapse easily. In this scenario there is one asset class, the CTA managers, that can provide real diversification to your portfolio.