This page will discuss Commodity trading advisor (CTA) funds which will briefly cover the general information on hedge funds, how they work, and some of the best CTA funds.
The specific talking points include:
- What is a commodities trading advisor?
- Hedge funds
- Futures contracts
- Best commodity trading advisor funds
What is a commodities trading advisor?
CTA Funds, short for Commodity Trading Advisor Funds, are a category of hedge funds that operate based on a strategy of managed futures.
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Commodity Trading Advisor can be an individual or an entity with valid registration for offering commodity trading advice.
These advisors are necessitated to meet proficiency requirements to qualify for registering as CTAs and they must be fluent with all sorts of commodity investments.
A wide range of trading strategies can be utilized by CTAs, which comprise systematic trading and trend following.
At the same time, CTA funds may involve discretionary strategies for actively managing investments.
In most cases, CTA registration is mandated by the National Futures Association (NFA) and must comply with the Commodity Futures Trading Commission (CFTC).
Hedge Funds
Hedge funds pool money for aggressive and riskier investments in stocks and assets, offering more exclusivity than mutual funds.
Managers involved with CTA hedge fund have greater flexibility and employ bolder strategies, earning higher fees than mutual funds.
Futures Contracts
A futures contract is a legal agreement to buy or sell a commodity, asset, or security at a set price and time.
Standardized for quality and quantity, futures contracts enable trading on exchanges.
Buyers commit to acquiring the asset, while sellers commit to delivering it at the contract’s expiration.
Best Commodity Trading Advisor Funds
Some of the best CTA funds according to IASG (as of December 2023) have been listed below.
Statar Capital LLC
Statar Capital LLC’s program has shown a 5.79% return over the past 12 months, with a compounded annual rate of return of 36.77%.
Operating primarily in natural gas, Statar Capital emphasizes directional and relative-value trades, guided by transparent fundamental data.
The manager, Ron Ozer, employs a calculated drawdown analysis for a robust portfolio construction process.
Martin Fund Management LP
Martin Fund Management’s Options Program has demonstrated a 32.39% return in the past 12 months, emphasizing exchange-listed derivatives of global soft commodities.
Founded by David Stephen Martin, the Registered CTA aims for outsized annual returns, focusing on low macro correlation and disciplined risk management.
Purple Valley Capital Inc.
Purple Valley Capital’s Diversified Trend 1 achieved -9.60% YTD performance with a systematic risk management strategy.
However, the performance since inception in 2020 has been 13.59% making it lucrative among most other CTA funds.
The asset management firm specializes in capturing large market trends globally, offering low correlation to traditional investment options for institutions and high-net-worth individuals.
Vivienne Investissement
Vivienne Investissement’s OUESSANT UCITS FUND (A) and MACH 3 exhibit a commitment to quantitative and systematic asset management.
Incorporated in France in 2005, the firm relies on research-led strategies and financial mathematics, managing a set of five quantitative strategies with a focus on listed, transparent instruments.
Trident Capital Management LLC
Trident Capital Management, a global macro strategy, presents multiple funds, including Trident Fund LP and Trident Fund LP Enhanced series.
Led by Jay Feuerstein, R.J. A. D’Orazio, and Matthew Gray, Trident employs proprietary momentum models for stability.
Their portfolios, designed for diverse clients, aim for uncorrelated returns in volatile market conditions.
Honorable Mentions
Some other notable CTA funds include:
- Typhon Capital Management LLC
- Mandatum Asset Management
- Glenhaven Capital LLC
- W.G. Wealth Guardian Ltd.
- Superfund Group
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