Want exposure to managed futures? Think multi-manager funds, according to a new white paper penned by William Marr and Alexander Rudin, principals of Ramius Trading Strategies.
The pair notes that a multi-manager approach, rather than a single-manager approach, is the way to go for investors looking for exposure to the asset class. “Currently investors have a choice between three approaches within the mutual fund space – index tracking, active single manager funds, and active multi-manager funds,” they wrote.
“Given the dynamic nature of markets, our belief is that an active, research based, innovative approach to executing the managed strategy is preferred. Furthermore, given that trading opportunities vary across time horizons, asset classes, and geographies, investors may be well-served to consider a multi-manager approach managed by a deeply resourced and experienced team.”
They also argue that most of the single-manager mutual fund products currently on the market are managed by well-known firms, but not firms that are known for their core expertise in the managed futures space. “As a result, not only are the track records of these single-manager mutual funds short, there are also typically no readily available hedge fund track records with which to compare them,” according to the authors.
“Conversely, while the live track record of multi-manager mutual funds is also relatively short, the underlying managers in which these funds invest tend to be leaders in the managed futures industry with track records, in many cases, well over a decade.”