PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RETURNS.
To produce low-correlation returns using a seasonal approach to futures spread trading.
Futures generally provide low correlation compared to other asset classes.
Spreads generally provide even lower correlation to other asset classes, even when compared to most managed futures strategies, which typically are trend-following.
Seasonality can significantly shape sentiment and short-term flows, thus influencing the market over the short-term.
Diversification across many categories and instruments generally results in risk mitigation.
We invest only in spreads that exhibit some seasonal tendencies through the use of futures contracts in eight major categories. Equities, equity futures and/or equity derivatives are not used.
Listed within each category below are some of the respective individual futures used at various times:
Currencies: Australian Dollar, British Pound, Canadian Dollar, Euro, Japanese Yen, and the Swiss Franc
Energy: Crude Oil, Heating Oil, Gasoline, and Natural Gas
Grains: Corn and Wheat
Interest Rates: US Treasury Bills, Notes, & Bonds, and Euro Dollars
Livestock: Feeder Cattle, Lean Hogs, and Live Cattle
Metals: Copper, Gold, Palladium, Platinum, and Silver
Softs: Cocoa, Coffee, Cotton, Orange Juice, and Sugar
Soybean Complex: Soybeans, Soybean Meal, and Soybean Oil
If a spread’s current pattern is similar to its long-term and intermediate-term seasonal patterns we generally expect past patterns may repeat to a high degree of probability based on similar economic and fundamental conditions.
Time targets, rather than price targets, are customarily used to determine optimal entry and exit points for trade execution.
We target total margin commitments generally between 5% - 20% of assets, with a target margin of 12.5%.
We typically employ loss limit targets on individual spread positions and maximum allocations for each category.
We use spreads across a wide variety of instruments and categories with varying time horizons and sides (bull, bear, and inter-commodity spreads) in an attempt to aid in risk mitigation through diversification.
Bensboro Advisors, LLC (the "Trading Advisor") was organized in September 2014 as a Texas Limited Liability Company. It is registered with the Commodity Futures Trading Commission (“CFTC”) as a Commodity Trading Advisor ("CTA"), and it is a member of the National Futures Association ("NFA").