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Low-cost demands spurring managed futures evolution | Pensions & Investments

Demand for lower fees and customization is pushing the small cadre of institutional systematic trend-followers to offer more affordable versions of their flagship strategies.

Competition for institutional investor assets is fierce in the managed futures market — widely accepted as the most commoditized in the hedge fund industry — with intense price competition between old-school firms such as Man AHL, Winton Capital Ltd. and Aspect Capital Ltd. and banks, alternative risk premium managers and replicators offering lower-cost exposure to trend-following strategies.

“Institutional investors are forward-looking now in the face of predicted market declines and this is playing out in the managed futures space,” said Mark S. Rzepczynski, co-managing partner and CEO of AMPHI Research & Trading LLC, Boston, a global macro/managed futures advisory and brokerage firm.

“Chief investment officers are ​ looking for crisis alpha production from systematic trend strategies that will make money in down markets but they aren’t willing to pay high fees for them. Pricing is the biggest issue with these asset owners,” Mr. Rzepczynski said.

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Low-cost demands spurring managed futures evolution – Pensions & Investments.

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