Key Takeaways
- • Managed futures and trend-following hedge funds (CTAs) have rebounded sharply in early 2024, with leading funds posting double-digit gains through February after underperforming in 2023.
- • Mulvaney Global Markets Fund surged 45.62% in February alone and is up 48.63% year-to-date in 2024, following a nearly 90% gain in 2023 and a 17.18% annualized return since its 1999 inception.
- • DUNN Capital's World Monetary and Agriculture Program climbed 19.58% in February and is up 30.66% through the first two months of 2024, with approximately $900 million under management across its programs.
- • February performance across leading CTAs was driven by substantial gains in agricultural futures and equity positioning, offset partially by modest losses in metals and volatility, with portfolio risk exposure incrementally expanding.
- • Systematic trend-following strategies invest in diversified futures contracts across commodities and financial assets, generating high absolute returns independent of market direction—a differentiation that appears to be resonating after a challenging 2023.
Summary
Managed futures funds and commodity trading advisors (CTAs) have executed a pronounced recovery in early 2024, reversing the sector's weak 2023 performance. Systematic and trend-following hedge funds have emerged as top performers year-to-date, with several strategies posting double-digit returns through the first two months of the year—a sharp reversal from 2023's challenging environment.
Paul Mulvaney's Mulvaney Global Markets Fund exemplifies the category's current strength. The fund gained 45.62% in February alone and stands up 48.63% through the first two months of 2024, according to two databases. This performance represents a striking acceleration following the fund's nearly 90% gain in 2023 and its 33% return in 2021. Since its 1999 inception, the fund has compounded at an annualized 17.18% return, demonstrating both the category's long-term potential and cyclical volatility.
DUNN Capital's World Monetary and Agriculture Program has similarly benefited from the current market environment, climbing 19.58% in February and posting 30.66% returns through the first two months of 2024. The program manages slightly more than $900 million in assets. Its leverage-adjusted counterpart, WMA Institutional, posted more modest gains of 9.38% in February and 14.57% year-to-date, managing $514 million as of February's close. According to DUNN's February client report, strong performance was driven by "sizeable gains in agriculturals and stocks, along with moderate gains" in fixed income, currencies, and other positions, with offsetting losses in metals and volatility. The firm noted that net long stock exposure represents the portfolio's most substantial positioning, with net short agricultural exposure as the second-largest allocation.
Managed futures strategies employ systematic, trend-following approaches that seek high absolute returns regardless of market direction by investing in diversified futures contracts linked to commodities and financial assets. This diversification and directional agnosticism have positioned the category to capture opportunities that eluded traditional long-only managers during 2023's market dynamics, setting the stage for the current rebound.
Paul Mulvaney's Mulvaney Global Markets Fund exemplifies the category's current strength. The fund gained 45.62% in February alone and stands up 48.63% through the first two months of 2024, according to two databases. This performance represents a striking acceleration following the fund's nearly 90% gain in 2023 and its 33% return in 2021. Since its 1999 inception, the fund has compounded at an annualized 17.18% return, demonstrating both the category's long-term potential and cyclical volatility.
DUNN Capital's World Monetary and Agriculture Program has similarly benefited from the current market environment, climbing 19.58% in February and posting 30.66% returns through the first two months of 2024. The program manages slightly more than $900 million in assets. Its leverage-adjusted counterpart, WMA Institutional, posted more modest gains of 9.38% in February and 14.57% year-to-date, managing $514 million as of February's close. According to DUNN's February client report, strong performance was driven by "sizeable gains in agriculturals and stocks, along with moderate gains" in fixed income, currencies, and other positions, with offsetting losses in metals and volatility. The firm noted that net long stock exposure represents the portfolio's most substantial positioning, with net short agricultural exposure as the second-largest allocation.
Managed futures strategies employ systematic, trend-following approaches that seek high absolute returns regardless of market direction by investing in diversified futures contracts linked to commodities and financial assets. This diversification and directional agnosticism have positioned the category to capture opportunities that eluded traditional long-only managers during 2023's market dynamics, setting the stage for the current rebound.
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