The Drawdown Report
December 2017 - Managed Futures
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Whether you are relatively new to Managed Futures or have been investing in them for some time now, a term you should be familiar with is drawdown. Drawdowns are inevitable and should be expected for every investor. That being said, you can choose strategies or different CTAs that fit your risk appetite. By definition, a drawdown is the peak-to-valley decline during a specific time period of an investment (refer to the illustration below). Though, past performance is never a clear indication of future results, drawdown calculations/percentages allows investors and advisors alike, measure the financial risk associated with each CTA. Analyzing drawdown for specific investments, however, is much more than measuring peak-to-valley loss. In this newsletter, we will discuss other key factors that should be considered prior to investing in any one commodity trading advisor or CTA.
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