I talked recently with an allocator, let’s call him “Charles”, who works with systematic trading managers. He contrasted for me two commodity trading advisors’ (CTAs) approaches to communicating about draw downs. One lost the allocation, the other did not – find out why.
Take every opportunity to communicate with your investor – here is a good example.
It is well known that there is increasing pressure on CTA fees. We see this in the proliferation of smart beta products offered with relatively low fees. Institutions don’t want to pay for beta. Putting aside what beta means in the CTA world, let’s look at the options for CTA fee structure and how to negotiate.
