From the Hedge Fund Journal:
Aspect has a frank and open dialogue with its investors, some of whom suggested that the firm should speed up or slow down models, or shift into different strategies, but Aspect remained resolute in its commitment to trend following. Some other CTAs that have de-emphasised trend following have seen lower returns in early 2016 and in 2014. Illustrates Todd: “Our style consistency allowed us to capture strong trends, particularly in energies and metals.” Indeed, Aspect has a 36% risk weighting to commodities, which happen to have generated persistent trends since 2014; but Aspect has no prejudice in favour of commodities or any other asset class. “We think all markets trend equally over time and commodities did not trend well in 2012 or 2013,” explains Lueck. He thinks “trends are episodic and unpredictable,” so the firm is agnostic over which asset classes and markets are likely to generate the best trends, and therefore it maintains exposure to a broad spread of markets. Aspect also avoids attempting to second-guess when trend following will, and will not, work. “It is infernally difficult to predict when markets will restore their mojo,” says Lueck, who laments that some Aspect clients capitulated and redeemed from the programme in early 2014. “Who could have known at the start of 2014 that the oil price would halve, the Fed would delay hiking rates or that bonds would stay higher for longer?” asks Lueck. For Aspect, 2014 is “a textbook example of why the managed futures or systematic approach is valuable as some discretionary traders were wrong footed by trying to call the turning point.”
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