Mr. Smith, any comments?

this is even better:

http://www.reuters.com/article/idUSLDE68L1TO20100922

Superfund has closed its sales offices in Singapore, Dubai, Sydney, Sao Paulo, Liechtenstein and Monaco and will now manage its operations out of Vienna, Hong Kong and New York, the firm said in a statement.

The firm, which uses computer programmes to run its managed futures funds, rose to prominence in the mid-1990s by regularly producing double-digit returns. Its performance over the past 12-18 months has, however, been poor.

According to Superfund’s latest report, its flagship Superfund Q-AG lost 24 percent in 2009 and was down 6.9 percent in the five months ended May. But the fund is up 516 percent since its inception in 1996 for an annualised return of 13.6 percent.

Superfund, started by former Austrian policeman Christian Baha does not disclose assets under management but news reports from 2007 said Q-AG alone had about $1.5 billion. (Reporting by Kevin Lim; Editing by Saeed Azhar)

Now the are betting hard in Japan according to the latest news from Hedgeweek.
“Superfund is focussing its investment lens on Japan’s retail investors, with the launch of Superfund Blue Japan. The firm hopes to secure USD 100 million within twelve months for the fund. It will use a market-neutral strategy picking investments from 2,500 global equities. The fund joins Superfund’s stable of two other managed futures funds in Japan, which use computer modelling to identify price signals in futures markets. Johann Peter Santer, President of Superfund Securities Japan Co., told Bloomberg that the fund “will only take short positions in futures indexes, while its long bets will be in single securities.” ”

So no more managed futures for Superfund i suppose? Or is this another way to admit that Superfund’s success on managed futures in the early 2000 was only pure luck?

Owners therefore have little risk, only reward. The investors assume all the risk and no guarantee of a return………………

They would likely be taxed as normal income and if the investor had a marginal tax rate of 33% for federal and state taxes, that would reduce his gains by 30% (90% * 33%) wiping out any possible real gains.

Although taxes would also have to be paid on DOW dividends, they would likely be taxed at 5 or 15% reducing the DOW real gain by no more than 3%. Also there is a .18% management fee for the DIA ETF so the real gain for an investor in the DOW could be as little as 24.5% during that time period compared to 0% for the Superfund.

I first heard of Superfund during the summer of 2008 when they were advertising their hedge fund on CNBC as a managed futures fund for the average investor. I also saw the CEO being interviewed several times where he claimed that market direction does not matter and that the program that they use is 100% automatic (no human intervention) and will automatically switch its trading strategy as the market turns.

Out of curiosity, I went to their site to see how the fund performed. They had 4 managed futures funds and claimed to have $1 billion under management. When I first looked at the performance of one of their funds, I wasn’t impressed since it had gone from a NAV of 1,000 at funds conception in November 2003 to 1,350 at the high of the stock market in October 2008 which is only 35% as compared to an increase in the DOW of about about 45% during the same time.

However from November 2008 through August 2009, the fund performed superbly increasing to nearly 1,700 (total performance since inception of 70%) while the DOW sank to 11,500 (total performance of about 25% during the same time).

I continued to watch the fund during the dept of the credit crisis from September 2008 through March 2009 and the fund continued to increase to 1,900 (90% increase since inception) while the DOW plummeted to below 7,000 (loss of about 25% over that period of time). I was becoming very impressed with the fund and could understand why people would invest in the fund even though it charged exorbitant fees (8.75% annual fee plus 25% performance fee and their highly leveraged fund even more) since it appeared that the fund had found the secret of profiting no matter the direction of the market.

Recently I investigated the fund again and was surprised to see that the fund had gone into a tailspin from April 2009 through December 2009 returning to a NAV of 1,350 (35% since inception) while the DOW had recovered to 10,000 (8% over the same period of time). See the performance chart and NAV tables in the following link.

http://www.superfund.com/HP07/download/U…

Initially I thought that their luck had run out but when I investigated their new funds that used the same strategy (inception April 2009), those funds increased by about 20% during that period while the original funds decreased about 30% during the same period of time. See the funds performance chart and NAV tables during that time in the following link.

http://www.superfund.com/HP07/download/U…

So how can two funds using the exact same strategy perform so drastically different during the same period of time? I don’t believe they can but instead the fund manager found a way to keep investors in the fund (not allow redemptions) while he put out declining performance numbers so they could pay off investors by the end of 2009. According to the funds prospectus, redemptions occur at the end of the month and require a 5 day written notice but redemptions can be denied if liquidity or other issues exist. It appears that the fund was able to stop investors from redeeming since their was only about 1/6th the value of redemptions during 2009 as compared to 2008.

Over the past two months, Superfund has closed 6 offices around the world leaving only Vienna, Hong Kong, and New York. I suspect they are on their last leg.

http://www.arabianbusiness.com/590295-au…

So from the time of conception, the funds have increased 30% which is about the same as the DOW (8% gain plus about 21% dividends over 7 years) while the fund returned about 92% to the firm (8.75% per year for fees x 7 years = 61.5% plus 30 percent in performace fees – fund performance was a high of 120% including performance fees x 25% = 30% for the firm and 90% for the investor).

I strongly suspect it was a scam but will be hard to prove. I suspect the fund will claim that the losses occured due to deleveraging and liquidity issues while trying to pay off investors as they were forced to sell off the assets due to a run on the fund. Like the banks during the credit crisis, they were likely marking assets much higher than the market value of the assets to try to make it appear that the fund was performing better than it really was.

You’re kidding right?
Goldman lays off the bottom 5-10% of performers each year routinely.
Citadel’s chief Kenneth Griffin is notorious for laying off people.

But I guess those firms aren’t successful LOL

2009 was not a good year for Superfund, but given its track record – this may just be an inevitable bump in an otherwise stellar performing Fund Manager.