The “Bond King” coming to Managed Futures
Look out Managed Futures! Here comes the Bond King! Bill Gross buying the drawdown in managed futures…well sort of.A couple years ago I mentioned to a friend one guy's approach to dampening the sine wave of risk:
Right before everyone headed out for the weekend, we learned Pimco filed a preliminary prospectus with the SEC to start a Managed Futures mutual fund. We will be the first to explain why Managed futures Mutual funds are not the way to go, and if we had to guess – we would bet this will be a replication strategy, using some low cost indicator like the Diversified Trends Indicator to replicate managed futures performance. But at this point things a little premature to pass judgment, because all we have to go on is a Investment News report on what it will entail:
“The fund will invest long and short in a variety of asset classes, including interest rates, commodities and currencies.”Now, Dan Collins over at the appropriately named Dan CollinsReport makes the argument this is a sort of timing move by Gross, getting into the asset class while it is underperforming....MORE
...During the dotcoms I knew a fund sub-adviser who would take his bonus checks and buy equity-indexed-annuities with a 3% annual guarantee, not to annuitize but for the accumulation.That could be what's going on here, an asset class that might move contrary to the bond biz or it might just be more assets under management.
He's probably beaten 90% of active managers over the last decade although I don't know if that would preserve real principal over the next ten years.
His specialty was biotechs and he wanted to reduce the semi-varience of his life....