Key Takeaways
- • Managed futures funds have outperformed global macro strategies, demonstrating superior capability in interpreting drivers of rates and currency markets during the 2016 period.
- • After experiencing poor returns during the 2011–12 European sovereign debt crisis, both managed futures and global macro products lost investor favor but regained traction as managed futures rebounded in 2014 coinciding with oil price declines and US dollar strength.
- • Investor interest in managed futures and macro strategies has returned following the performance recovery in 2014, though the sector continues to experience volatility that affects institutional capital allocation decisions.
Summary
Managed futures funds have demonstrated superior performance relative to their global macro counterparts, particularly in their ability to navigate and interpret the complex drivers underlying rates and currency markets. This relative outperformance marks a significant recovery for a strategy class that faced substantial headwinds in recent years.
The managed futures and global macro space experienced a prolonged period of underperformance during and immediately following the European sovereign debt crisis of 2011–12. This extended downturn caused institutional investors and hedge funds to reduce their allocations to these strategies, dampening investor appetite for what had previously been core alternative investment vehicles. However, the performance trajectory shifted in 2014, when managed futures funds began to rebound in tandem with macroeconomic catalysts—specifically the precipitous decline in oil prices and the sustained strengthening of the US dollar. This recovery reignited institutional interest in the sector as investors recognized that these strategies could generate meaningful returns in specific market environments.
Despite the rebound in 2014 and the subsequent outperformance of managed futures relative to macro peers, the broader sector continues to contend with volatility that influences investor behavior and capital deployment. The current competitive advantage held by managed futures funds suggests that their algorithmic and systematic approaches to market interpretation are proving more effective than discretionary macro strategies in the present market environment.
The managed futures and global macro space experienced a prolonged period of underperformance during and immediately following the European sovereign debt crisis of 2011–12. This extended downturn caused institutional investors and hedge funds to reduce their allocations to these strategies, dampening investor appetite for what had previously been core alternative investment vehicles. However, the performance trajectory shifted in 2014, when managed futures funds began to rebound in tandem with macroeconomic catalysts—specifically the precipitous decline in oil prices and the sustained strengthening of the US dollar. This recovery reignited institutional interest in the sector as investors recognized that these strategies could generate meaningful returns in specific market environments.
Despite the rebound in 2014 and the subsequent outperformance of managed futures relative to macro peers, the broader sector continues to contend with volatility that influences investor behavior and capital deployment. The current competitive advantage held by managed futures funds suggests that their algorithmic and systematic approaches to market interpretation are proving more effective than discretionary macro strategies in the present market environment.
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