Managed futures or commodity trading advisers (CTAs) have been a good source of diversification and positive returns for hedge fund investors for many years. Barclay Trading Group's CTA index, for example, shows average correlation of just 0.070 with the HFRI fund weighted composite, and 0.223 with the HFRI fund of funds composite from 1990 to the end of 2004. Since the index's inception in 1980, there have been only three instances in which a year has ended with a loss, the greatest being –1.19% in 1999. But for a strategy based on long-term trends, the current market environment has made it difficult to find opportunities. At the end of August...
