Cheese, sunflower seeds and rough rice sounds like an unappetizing mix -- unless you happen to be a hedge-fund manager.
A handful of computer-driven funds had a bumper 2017 by betting on the future price of such “exotic” assets. The success of this type of managed futures strategy, the industry’s term for trend-following, is now drawing new entrants despite the risks created by the low levels of liquidity.
... the limited capacity in many exotic markets, along with the relatively high trading costs and the need for extensive research, may deter some firms.
... The principles of trend-following are easy, but deploying the strategy in these markets is a challenge."
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