Dighton Capital Management, a managed futures fund manager, has moved all its assets under management into cash because of the uncertainty in the markets.
The company has three funds with annualised returns of 45.2 per cent, 17.6 per cent and 24.7 per cent, and a combined AUM of USD230m.
Alex Moiseev, principal and chief investment officer, Dighton Capital Management, says: “There is so much uncertainty in the markets at the moment that the risk/reward trade-off is unattractive. We therefore feel that until we have a clearer picture on what is likely to happen in the FX markets for example, and also greater clarity on the economic policies of some G20 countries, it is better to be in cash than other asset classes at the moment. In such circumstances, we prefer to stay on the sidelines and await clear opportunities. This approach has delivered great returns for us, especially in 2008 when the crisis really started to hit.”
In terms of the long term view on the global economy, Dighton believes that there will be very little long term growth. The view is that equity markets will be trading sideways, dominated by significant volatility within that bandwidth. The long term view on commodities remains bullish, but in the short term there is still significant trading risk.
Moiseev says: “One of the major factors holding back global growth is that there is so much government money in some large corporates and the economy as a whole, it is stifling entrepreneurialism. In some ways the free economies have turned into socialist states.”
Dighton says that the increased volatility in the markets should fuel strong growth in demand for managed futures because they benefit from this environment as they can deliver attractive returns whether the markets are rising or falling.
