Although every year we profile emerging CTAs, we preface the story with the qualification that the feature is “not an endorsement but a review of new talent,” we certainly like it when our Hot new CTAs follow-up that distinction with solid performance. And while past honorees managed to string together strong performances in the face of difficult market conditions, unfortunately that is not the case this year as all of last year’s profiles are in negative territory.
Argus Capital Management
Each of the last six years we have profiled at least one option writer in this feature and all have fared relative well (despite one manager being short puts in September 2001) until Argus suffered a 37% drawdown in April. In “Options writers roll with shock” Maruf Khan Noorpuri pointed out that option writers can face greater risk with sharp upward moves, and that is apparently what happened to Argus as the S&P 500 rallied sharply in April.
Cunningham Asset management
It has been another difficult year for trend followers and Cunningham has had few long-term trends to jump on but its focus on risk management has kept it away from large losses despite it worst 12-month period. Cunningham is down just a couple of percent for the year following a 30% year in 2006.
Stewart Capital Management
Perhaps it would be too much to expect an ag based countertrend CTA program designed to excel in non trending environments to perform well in the sharply trending and reversing markets this year. Stewart, down 6.82% through July, dropped nearly 10% in April, when there were sharp moves in wheat and live cattle.
