The JWH Global Trust commodity pool has been somewhat of a vagabond in recent years moving from Cargill Investor Services to Refco Commodity Management and then into limbo with the Refco bankruptcy, but it recently has been acquired by R.J. O’Brien and Associates and appears on solid footing.
R.J. O’Brien President Colleen Mitchell calls the move a strategic decision that will expand RJO’s presence in the alternative asset sector. “This acquisition allows us to not only garner the managing owner interest in this public fund, but it also provides us with the sales distribution channels and a solid internal team — those were two major points that we were missing,” Mitchell says. “We feel it is going to leapfrog us into this alternative asset sector, which is a wonderful diversification from our traditional brokerage business.”
The fund that is managed by John W. Henry & Co. continued to trade through the Refco bankruptcy but was open only to redemptions, according to Annette A. Cazenave, SVP of R.J. O’Brien Fund Management Inc. “We are working on getting a new document into the regulators to reopen it to new investments,” she says.
Mitchell says the addition of the former Cargill team will help grow their existing fund-of-fund product as well as possible new products. Cazenave agrees, “We are looking forward to getting this product up and running and start working on the next one.”
The fund has about $130 million under management, down from $320 million in October 2005. It has suffered from poor performance along with the uncertainty of the Refco situation.
All four JWH programs that are a part of JWH Global Trust are down for the year and have experienced poor performance the last two years but have compound annual returns in double digits.
Mitchell points out that despite recent poor performance, or perhaps because of it, it is a great time to get into the fund. “It is not fun to be in but the fund has been there before and we anticipate that this is actually a great time to get in.”
Commodity trading advisors (CTA) have struggled for most of 2006 but October and November have offered strong trends, particularly in the grain sector.
Even the Barclay Currency traders index — the toughest sector for managers in 2005 and 2006 — was positive this fall pushing the overall CTA index to 3.09% as of November.
In a continuing trend discretionary managers have outperformed systematic managers with the Barclay Discretionary Index at 6.28% and the systematic index at 1.76% through November.