IASG Top Month Performers with AUM > $10M* and Top YTD Performers*
In finance, a commodity trading advisor or a “CTA” is an individual person or an organization whose responsibility is to provide sound financial advice to others about the best assets to buy or sell. Commodity trading advisors also provide asset management and buy or sell futures on many stock and commodity exchanges.
Like any other legal entity, a Commodity Trading Advisor is required to register with the National Futures Association—the self-regulatory organization for the industry—before they can start to manage futures or deal with the public. They have to go through Federal bureau checks on their backgrounds and have financial records analyzed before getting the license to trade. Currently there are about 900 CTAs registered with NFA.
This is just the formal definition of a Commodity Trading Advisor but, what is the job of a CTA and what are the activities that they have to do?
Types of Commodity Trading Advisors
There are many types of Commodity Trading Advisors but the most popular and biggest type are the “Trend Followers”. As their name reveals, they follow trends. There are also CTAs that use different investment and trading strategies such as: Arbitrage, Counter-trend, Fundamental Trading, Momentum – which is very similar to trend following, Options, Pattern Recognition, Seasonal and Cyclical Spreading and Hedging traders and other. All these CTAs can also be categorized in Discretionary or Systematic.
Discretionary are these who make the decision-making themselves, while systematic just execute the signals of systems. Some CTAs mix them.
The trend followers manage futures by using technical or fundamental trading systems to monitor markets a variety of markets. This is because the correlations between markets differ and offer diversification benefits. While losing money in some markets they make money in others. Trend followers also use leverage to open positions bigger than the assets they manage. This way CTAs make profit from various sources with different profiles. Even though they have a low % of profitable trades, usually in the range of 35-40%, they make much more on their winning trades, than their losing and thus offer significant returns. As you can see on the chart below where a trend following index is shown, trend followers achieved very good returns in the last 31 years.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.
*THE “TOP PERFORMERS MONTHLY” AND THE “TOP PERFORMERS YTD” SET FORTH ABOVE ARE THE MANAGED ACCOUNT PROGRAMS LISTED ON WWW.IASG.COM THAT OBTAINED THE HIGHEST RATES OF RETURN FOR THE MOST RECENT CALENDAR MONTH AND YEAR RESPECTIVELY AND HAVE ASSETS >$10M. ADVISORS MUST HAVE >24 MONTHS TRACK RECORD TO BE DISPLAYED ON THE IASG TOP YTD PEFORMERS LIST. THE ADVISORS LISTED ON WWW.IASG.COM HAVE PROVIDED THE RATE OF RETURN AND OTHER INFORMATION FOR THEIR RESPECTIVE PROGRAMS. HIGHER RETURNS MAY HAVE BEEN ACHIEVED BY OTHER ADVISORS WHO HAVE CHOSEN NOT TO SUBMIT THEIR PERFORMANCE DATA TO IASG. IASG DOES NOT GUARANTEE THE ACCURACY OF THE INFORMATION PROVIDED BY THE ADVISORS. NO INVESTMENT SHOULD BE MADE WITHOUT CAREFULLY REVIEWING THE ADVISOR’S DISCLOSURE DOCUMENT.
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