FM: What is your opinion on what happened?
BD: I don't yet know exactly what happened.
FM: What would you like to see the industry do to gain back its confidence?
BD: The confidence factor will be greatly influenced by the ultimate resolution of the MF Global debacle. Hopefully the CME, or others involved in the MF Global collapse will make the investors whole. I would like the exchange to stand behind its member firm as it may have done before it went public. On a smaller scale, more traders will do what we do, which is not rely on one broker but trade through multiple brokers, and only retain the minimum required funds at the broker.
FM: We really have not heard any voice representing the managed futures space. Do CTAs need such a voice?
BD: There has been some vocal opposition raised in the bankruptcy proceeding on behalf of futures investors. Perhaps the CFTC will eventually take a strong stand on behalf of the investors. Time will tell. Historically, the managed futures space has lacked a strong, unified voice. Perhaps that is one of the reasons the general public seems largely uneducated on the benefits of managed futures. Perhaps now this will change and be a positive result of the MF Global situation.
BD: Somebody will emerge as representing the industry. The managers of the industry. That would include customers of futures products. We would not want to be up front in something like that. We are low key, that is why we are in Stewart and not New York or Chicago.
FM: Where do you see the managed futures industry heading in the next five to 10 years?
BD: Undoubtedly the MF Global debacle will result in further regulatory oversight of (probably) limited utility. This will likely eliminate many of the smaller traders who won't be able to keep up with compliance requirements. Over time, I think more of the general public will realize the importance of including managed futures as part of their portfolio and we will see greater market penetration on the retail investor side. Although, until the overall managed futures education process improves, investor allocations will continue to grow at a slow pace.
I like to think DUNN is going to become a larger player in the managed futures industry. The industry without a doubt will grow over the next five to 10 years. You can only look at the non-correlation and the positive performance and keep it down for so long. It can only improve.