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“Who Made Money in the Brexit Chaos? Machines, Not Humans” (The Wall Street Journal)

By June 29, 2016 No Comments

“Who Made Money in the Brexit Chaos? Machines, Not Humans”
The Wall Street Journal
June 29, 2016
Selected excerpts:

Wall Street is tallying up the winners and losers after the severe market reaction to last week’s Brexit vote. One theme has emerged early—the computers got it right and the humans got it wrong.

Yet for one set of computers that form strategies about the markets, such sentiment wasn’t even considered.
This fund category, sometimes called commodity trading advisors, or CTAs, uses customized trading algorithms to spot market trends and place bets on futures and other derivatives. Most of the models didn’t factor in British election polls, bookmakers’ odds or the political-tea leaf reading that swayed other investors looking for an edge.

In the weeks leading up to the Brexit vote, the trading models at many of these firms adopted a defensive pose. They favored high-quality government bonds, gold and safer currencies like the yen, while mostly avoiding riskier bets like oil and emerging markets.

Société Générale’s CTA Index gained 1.5% on Friday. AQR Capital Management LLC, Fort and Welton Investments Partners LLC were among the big gainers.”

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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