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“A True CTA Will Stick to Chosen Path” (FTfm)

By June 11, 2012 No Comments

“Should investors favour the systematic approach, sometimes known as a black box approach… Or should they favour the discretionary approach that relies on the instinct and experience of humans…?  The short answer in both cases is no. The long answer is more nuanced.”

“Christopher Keenan, director of strategic marketing at Welton Investment Corporation, says investors should not willingly narrow their choice to just one of the two strategies.  Both share attractive return traits and performance is generally non-correlated to equities. They offer potential for equity market tail risk protection (primarily managed futures), and decades of historical track record…

Moreover, the two styles often complement each other… This, he explains, is because discretionary managers are often looking for early fundamental price/value differences, whereas systematic managers often follow the ensuing capital flows to right these fundamental imbalances.

“Why should an investor deliberately limit their exposure to just one of these viewpoints?” he asks. “They shouldn’t… In my opinion investors should be contemplating the proportion of each that makes the most sense for their particular portfolio.”

The information contained herein is not for retail investors but intended for use by institutional and professional investors including “Qualified Purchaser” within the meaning of the 1940 Act which also qualifies it for the status of “Qualified Eligible Person” under CFTC Regulation 4.7. Alternative investments are speculative, involve substantial risks and are not suitable for all investors. This information is not a solicitation for investment. Such investment is only offered on the basis of information and representations made in the appropriate offering documentation. Past performance is not necessarily indicative of future results. Welton Investment Partners LLC is a Delaware limited liability company that provides investment advisory and day-to-day operational services previously assumed by Welton Investment Corporation, its predecessor, which itself merged from a California corporation originally formed in 1988.

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