• We Like Small Caps Too

    October 19, 2017
    Small Caps

    We enjoyed reading Jim Paulsen’s recent piece in Barron’s, explaining why it may be a good time for small cap stocks (which we’d encourage you to read as well). We were tempted to simply post it as validation for what we’ve been telling clients, but upon further reflection, figured it would be better to articulate why we at 361 Capital like the asset class generally, and what we believe to be the compelling merits of our approach more specifically.

  • Sector Drawdowns

    October 17, 2017

    Michael Santoli pointed out yesterday that if the current lack of volatility holds through December, the market will print a new record for the number of days without a 5% move. While it is true that on the surface the volatility of the market has been very calm, under the surface there have been several strong currents.

  • For much of 2017, corporate earnings and Wall Street sentiment enjoyed a happy, healthy relationship. Consider the honeymoon over. Corporate earnings trounced expectations again this quarter, but Wall Street analysts just aren’t viewing those results through the same love-struck eyes.

  • How to Perfectly Time Managed Futures Allocations

    October 05, 2017
    Investor Behavior, Managed Futures

    2017 has seen equity markets steadily moving higher, volatility remaining at historically low levels, and trend-following managed futures strategies continuing to languish. Amid this backdrop, investors naturally ask if this has created a buying opportunity, with the expectation that markets, volatility, and trend-following should revert to longer-term averages. This is a reasonable question and expectation, but what really matters is whether investors can predict when this long-awaited mean-reversion will occur. Conventional wisdom says they can’t, but according to a recent article at ValueWalk, it appears the author believes timing managed futures allocations may be possible. In a recent whitepaper, they address “some of the potential benefits, challenges and opportunity costs” seen for investors who are “seeking to time managed futures allocations.”

  • Airbags and Antilock Brakes

    September 28, 2017
    Managed Futures, Portfolio Construction

    Over the past year, the Managed Futures category has suffered net outflows of approximately $2.8 billion, equating to roughly a 10% reduction in total AUM on a year-over-year basis, after accounting for the performance of the category. Those net outflows give Managed Futures the unenviable distinction of landing at the bottom of all of the Morningstar categories that we track, inclusive of both live and dead mutual funds and ETFs, across 8 alternative categories, 18 equity categories, 18 fixed income categories, and 1 commodity category. This may be understandable (albeit unjustifiable we’d argue) in light of the fact that with a one-year category average return of -4.7% through the end of August, only Bear Market (-24.4%) and Long Government (-5.7%) funds performed worse. Interestingly, Bear Market and Long Government funds experienced performance-adjusted net inflows equating to 18% and 5% of total assets under management, respectively, despite their performance. Hmm.