News - 20.01.09

Managed futures are clearly the winners of the current financial crisis: while stocks worldwide have lost nearly half of their value over the past year, and the hedge fund market lost nearly a quarter of its value (MSCI World – 42.11% / Hedge Fund Index -21.69%), managed futures have achieved double digit returns over the past 12 months (Barclay CTA Hedge +13.56%). The Varengold fund of hedge funds, with focus on managed futures strategies, ranks among the best of its class worldwide, and has achieved an annual return of +16.26%, with a monthly volatility of only 2.86%. For more details, see the table below.

According to statements from the data provider Eurekahedge, hedge fund investors have faced a loss of approximately 264 billion euro in the last year, 90% of which was in the last three months. The asset class managed futures delivers visible value in a portfolio through active management and diversification across all markets, such as stocks, bonds, commodities and currencies. “The developments in the current crisis have made it clear once again that managed futures optimally take advantage of price and market fluctuations, and can profit from high volatility and falling markets. Managed futures strategies diversify across stocks and bonds, all the way to currencies and commodities, and thereby stabilize portfolio return and reduce risks over the long term,” said Yasin Sebastian Qureshi from the Varengold Wertpapierhandelsbank AG in Hamburg.

Over the past year, the hedge fund industry was not only massively hit by the direct consequences of the financial crisis, but also discussions about credit risk, brought on by the Lehman bankruptcy, as well as the current alleged Madoff scandal. “In the sense of investment security for investors, our managed fund of hedge funds, the HI Varengold CTA Hedge, invests exclusively in market traded instruments on the basis of managed accounts. Managed accounts are accounts with limited risk, and offer investors effective risk management, transparence for each individual transaction, and liquidity. The use of market traded instruments also reduces credit default risk, as well as valuation risks, which have affected many investors in the current financial crisis,” said the managed futures expert, who started his career as manager of his own single strategy, and later realized the diversification opportunities of the asset class, and today with 14 years of experience is the specialist in Germany for managed futures funds of funds.

The HI Varengold CTA Hedge managed futures fund of funds, cleared for public sale in 2006, has been recognized as the best fund of its class multiple times, and in November 2008 was awarded for being Germany's best fund of hedge funds for the second time in a row with the “Germany's Annual Hedge Fund Award.” For the current year, Qureshi predicts further increases in return: “We strive for a range of returns of 10-12% for our fund, after costs.”