Ceres Tactical Swings to $1.05M Loss Amid Market Volatility

TL;DR

**Ceres Tactical's Q2 loss is a red flag; time to re-evaluate their 'systematic' approach.**

AI Summary

CERES TACTICAL SYSTEMATIC L.P. reported a net loss of $1,053,000 for the three months ended June 30, 2025, a significant decline from the net income of $1,756,000 reported in the same period of 2024. For the six months ended June 30, 2025, the net loss was $1,592,000, contrasting sharply with a net income of $2,580,000 in the prior year. The change in net asset value per Redeemable Unit for the six months ended June 30, 2025, was a decrease of $0.07, compared to an increase of $0.11 for the six months ended June 30, 2024. The partnership's investments in futures contracts across various sectors like energy, foreign exchange, and interest rates showed mixed performance, with significant unrealized depreciation in some areas. The fair value of financial instruments, primarily futures and forward contracts, is largely determined using Level 1 inputs, totaling $1,000,000 for futures and $0 for forward contracts as of June 30, 2025. The partnership continues to manage its portfolio with a focus on systematic strategies, but market volatility has impacted recent performance. No specific strategic outlook or new business changes were detailed beyond the ongoing investment activities.

Why It Matters

This shift from profit to loss for CERES TACTICAL SYSTEMATIC L.P. signals potential challenges in its systematic trading strategies, which could impact investor returns and confidence. The competitive landscape for managed futures funds is intense, and sustained losses could lead to redemptions, further pressuring the fund. Employees of Ceres Managed Futures LLC, the general partner, might face scrutiny regarding their trading models. For the broader market, this performance could reflect underlying volatility in commodities, currencies, and interest rates, which are key components of the fund's portfolio.

Risk Assessment

Risk Level: medium — The partnership reported a net loss of $1,053,000 for Q2 2025 and a $1,592,000 net loss for the six months ended June 30, 2025, a significant reversal from prior year profits. This indicates a heightened risk of capital depreciation for investors. The reliance on Level 1 fair value inputs for futures contracts, totaling $1,000,000, suggests exposure to highly liquid but volatile markets.

Analyst Insight

Investors should scrutinize the underlying causes of the net loss, specifically the performance of their futures and forward contracts. Consider reducing exposure if the systematic strategies fail to adapt to current market conditions, as the trend from profit to loss is concerning.

Key Numbers

• $1.05M — Net Loss (Q2 2025) (Significant reversal from $1.76M net income in Q2 2024.)
• $1.59M — Net Loss (YTD June 2025) (Contrasts with $2.58M net income for YTD June 2024.)
• -$0.07 — Change in NAV per Unit (YTD June 2025) (Represents a decrease, compared to a +$0.11 increase in prior year.)
• $1M — Fair Value of Futures (Level 1) (Indicates exposure to highly liquid but volatile markets as of June 30, 2025.)

Key Players & Entities

• CERES TACTICAL SYSTEMATIC L.P. (company) — filer of the 10-Q
• Ceres Managed Futures LLC (company) — general partner of CERES TACTICAL SYSTEMATIC L.P.
• $1,053,000 (dollar_amount) — net loss for the three months ended June 30, 2025
• $1,756,000 (dollar_amount) — net income for the three months ended June 30, 2024
• $1,592,000 (dollar_amount) — net loss for the six months ended June 30, 2025
• $2,580,000 (dollar_amount) — net income for the six months ended June 30, 2024
• $0.07 (dollar_amount) — decrease in net asset value per Redeemable Unit for six months ended June 30, 2025
• $0.11 (dollar_amount) — increase in net asset value per Redeemable Unit for six months ended June 30, 2024
• June 30, 2025 (date) — end of the reporting period
• August 8, 2025 (date) — filing date of the 10-Q

FAQ

Risk Factors

• Market Volatility Impacting Performance [high — market]: The partnership experienced a significant net loss of $1,053,000 for Q2 2025, a stark reversal from a $1,756,000 net income in Q2 2024. This trend continued into the year-to-date period with a net loss of $1,592,000 for the six months ended June 30, 2025, compared to a net income of $2,580,000 in the prior year. The change in net asset value per Redeemable Unit also turned negative, decreasing by $0.07 in the first six months of 2025, versus an increase of $0.11 in the same period of 2024.
• Unrealized Depreciation in Futures [medium — market]: Investments in futures contracts across various sectors, including energy, foreign exchange, and interest rates, showed mixed performance. Notably, there was significant unrealized depreciation in some of these futures positions as of June 30, 2025, contributing to the overall financial decline.
• Dependence on Futures and Forward Contracts [medium — financial]: The fair value of the partnership's financial instruments, primarily futures and forward contracts, is heavily reliant on market valuations. As of June 30, 2025, the fair value of futures was $1,000,000, with forward contracts valued at $0. The performance of these instruments directly impacts the partnership's net asset value and profitability.

Industry Context

The managed futures industry, where CERES TACTICAL SYSTEMATIC L.P. operates, is characterized by its systematic, often quantitative, approach to trading across diverse global markets. These strategies aim to profit from both rising and falling prices in commodities, currencies, interest rates, and equity indices. However, the industry is highly sensitive to market volatility and shifts in macroeconomic trends, which can lead to periods of significant performance swings.

Regulatory Implications

As a limited partnership engaged in futures trading, CERES TACTICAL SYSTEMATIC L.P. is subject to regulations by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Compliance with trading rules, reporting requirements, and capital adequacy is crucial. The current market environment and performance downturn may attract increased regulatory scrutiny regarding risk management practices.

What Investors Should Do

1. Monitor performance closely for signs of recovery.
2. Review the impact of market volatility on specific futures segments.
3. Assess the partnership's risk management framework.

Key Dates

• 2025-06-30: End of Second Quarter and Six-Month Period — Reporting period for the significant net loss of $1,053,000 for the quarter and $1,592,000 year-to-date, and a decrease in NAV per unit of $0.07.
• 2024-06-30: End of Second Quarter and Six-Month Period (Prior Year) — Comparison period showing net income of $1,756,000 for the quarter and $2,580,000 year-to-date, with a positive NAV per unit increase of $0.11.

Glossary

Redeemable Unit

A class of security that allows the holder to sell it back to the issuer at a specified price or based on a formula, typically tied to the net asset value. (The change in net asset value per Redeemable Unit directly reflects the performance of the partnership's investments and impacts investor returns.)

Futures Contracts

A standardized legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. (These are a primary investment vehicle for CERES TACTICAL SYSTEMATIC L.P., and their performance, including unrealized depreciation, significantly affects the partnership's financial results.)

Level 1 Inputs

Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. (The fair value of $1,000,000 in futures is determined using Level 1 inputs, indicating reliance on readily available market prices for valuation.)

Systematic Strategies

Investment strategies that follow predefined rules and algorithms, often based on quantitative models, to make investment decisions. (This is the core investment approach of CERES TACTICAL SYSTEMATIC L.P., but market volatility has recently challenged its effectiveness.)

Year-Over-Year Comparison

Compared to the prior year's periods, CERES TACTICAL SYSTEMATIC L.P. has experienced a dramatic downturn. For the three months ended June 30, 2025, the partnership reported a net loss of $1,053,000, a significant reversal from the $1,756,000 net income in the same period of 2024. Similarly, the six-month year-to-date period shows a net loss of $1,592,000, contrasting sharply with a net income of $2,580,000 in 2024. The change in net asset value per unit has also shifted from a positive $0.11 increase in the prior year to a $0.07 decrease for the six months ended June 30, 2025, indicating a substantial deterioration in investment performance.

Filing Documents

• d908335d10q.htm (10-Q) — 1220KB
• d908335dex311.htm (EX-31.1) — 11KB
• d908335dex312.htm (EX-31.2) — 11KB
• d908335dex321.htm (EX-32.1) — 4KB
• d908335dex322.htm (EX-32.2) — 4KB
• 0001193125-25-176472.txt ( ) — 5434KB
• tdff-20250630.xsd (EX-101.SCH) — 629KB
• d908335d10q_htm.xml (XML) — 1258KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item1. Financial Statements. Ceres Tactical Systematic L.P. June 30, 2025 (Unaudited) December 31, 2024 Assets: Equity in trading account: Unrestricted cash $ 38,557,544 $ 39,535,231 Restricted cash 6,668,190 7,990,887 Foreign cash (cost $ 423,550 and $ 612,477 at June 30, 2025 and December 31, 2024, respectively) 434,172 602,110 Net unrealized appreciation on open futures contracts 321,318 405,742 Total equity in trading account 45,981,224 48,533,970 Interest receivable 135,497 153,487 Total assets $ 46,116,721 $ 48,687,457 Liabilities and Partners' Capital: Liabilities: Net unrealized depreciation on open forward contracts $ 249,040 $ 3,602 Accrued expenses: Ongoing selling agent fees 28,281 30,008 Management fees 23,550 25,585 General Partner fees 33,310 35,373 Professional fees 156,551 141,996 Redemptions payable to General Partner - 49,999 Redemptions payable to Limited Partners 253,920 351,324 Total liabilities 744,652 637,887 Partners' Capital: General Partner, Class Z, 463.0990 Redeemable Units outstanding at June 30, 2025 and December 31, 2024 510,636 512,612 Limited Partners, Class A, 50,457.3548 and 53,003.6748 Redeemable Units outstanding at June 30, 2025 and December 31, 2024, respectively 42,006,210 44,464,107 Limited Partners, Class D, 2,639.4900 and 2,826.3240 Redeemable Units outstanding at June 30, 2025 and December 31, 2024, respectively 2,750,045 2,967,265 Limited Partners, Class Z, 95.3870 Redeemable Units outstanding at June 30, 2025 and December 31, 2024 105,178 105,586 Total partners' capital (net asset value) 45,372,069 48,049,570 Total liabilities and partners' capital $ 46,116,721 $ 48,687,457 Net asset value per Redeemable Unit: Class A $ 832.51 $ 838.89 Class D $ 1,041.89 $ 1,049.87 Class Z $ 1,102.65 $ 1,106.92 See accompanyin

Notes to Financial Statements

Notes to Financial Statements (Unaudited) 1.Organization: Ceres Tactical Systematic L.P. (the "Partnership") is a limited partnership organized under the partnership laws of the State of New York on December 3, 2002 to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures, option, swap and forward contracts. The sectors traded include currencies, energy, grains, indices, U.S. and non-U.S. interest rates, livestock, metals and softs. The commodity interests that are traded by the Partnership are volatile and involve a high degree of market risk. The General Partner (as defined below) may also determine to invest up to all of the Partnership's assets in United States ("U.S.") Treasury bills and/or money market mutual funds, including money market mutual funds managed by Morgan Stanley or its affiliates. Between March 27, 2003 (commencement of the public offering period) and April 30, 2003, 36,616 redeemable units of limited partnership interest in the Partnership ("Redeemable Units") were sold at $ 1,000 per Redeemable Unit. The proceeds of the initial public offering were held in an escrow account until April 30, 2003, at which time they were turned over to the Partnership for trading. The Partnership was authorized to publicly offer 300,000 Redeemable Units during the initial public offering period. As of December 4, 2003, the Partnership was authorized to publicly offer an additional 700,000 Redeemable Units. As of October 7, 2004, the Partnership was authorized to publicly offer an additional 1,000,000 Redeemable Units. As of June 30, 2005, the Partnership was authorized to publicly offer Redeemable Units previously registered. The public offering of Redeemable Units terminated on November 30, 2008. The Partnership currently privately and continuously offers Redeemable Units to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Notes to Financial Statements

Notes to Financial Statements (Unaudited) As of June 30, 2025, all trading decisions were made for the Partnership by DCM Systematic Advisors SA ("DCM"), Drury Capital, Inc. ("Drury"), Episteme Capital Partners (UK) LLP, Episteme Capital Partners (US) LLC and Episteme Capital Partners (Cayman) LTD (collectively, "Episteme"), and Millburn Ridgefield Corporation ("Millburn") (each an "Advisor" and, collectively, the "Advisors"), each of which is a registered commodity trading advisor, or has otherwise represented that it is exempt from registration as a commodity trading advisor. The Advisors are not affiliated with one another, are not affiliated with the General Partner or MS&Co., and are not responsible for the operation of the Partnership. Effective January 1, 2020, Millburn trades the Partnership's assets allocated to it through a managed account in the name of the Partnership pursuant to Millburn's Multi-Markets Program. The General Partner and Millburn have agreed that Millburn will trade the Partnership's assets allocated to Millburn at a level that is up to 1 times the amount of assets allocated. The amount of leverage may be increased or decreased in the future, but it may not exceed 2 times the amount of assets allocated. Effective November 1, 2020, Episteme trades the Partnership's assets allocated to them through a managed account in the name of the Partnership pursuant to Episteme's Systematic Quest Program. The General Partner and Episteme have agreed that Episteme will trade the Partnership's assets allocated to Episteme at a level that is up to 1.5 times the amount of assets allocated. The amount of leverage may be increased or decreased in the future, but it may not exceed 2 times the amount of assets allocated. Effective January 1, 2021, DCM trades a portion of the Partnership's assets allocated to it through a managed account in the name of the Partnership pursuant to DCM's Diversified Alpha Program. The General Partner and DCM have agre

Notes to Financial Statements

Notes to Financial Statements (Unaudited) The General Partner has delegated certain administrative functions to SS&C Technologies, Inc., a Delaware corporation, currently doing business as SS&C GlobeOp (the "Administrator"). Pursuant to a master services agreement, the Administrator furnishes certain administrative, accounting, regulatory reporting, tax and other services as agreed from time to time. In addition, the Administrator maintains certain books and records of the Partnership. The cost of retaining the Administrator is allocated among the pools operated by the General Partner, including the Partnership. 2. Basis of Presentation and Summary of Significant Accounting Policies: The accompanying financial statements and accompanying notes are unaudited but, in the opinion of the General Partner, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership's financial condition at June 30, 2025 and the results of its operations and changes in partners' capital for the three and six months ended June 30, 2025 and 2024. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership's Annual Report on Form 10-K (the "Form 10-K") filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2024. The December 31, 2024 information has been derived from the audited financial statements as of and for the year ended December 31, 2024. Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year. Use of Estimates . The preparation of financial statements and accompanying notes in conformity with accounting principles generally acc

Notes to Financial Statements

Notes to Financial Statements (Unaudited) Income Taxes. Income taxes have not been recorded as each partner is individually liable for the taxes, if any, on its share of the Partnership's income and expenses. The Partnership follows the guidance of ASC 740, "Income Taxes," which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in the course of preparing the Partnership's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions determined not to meet the more-likely-than-not threshold would be recorded as a tax benefit or liability in the Partnership's Statements of Financial Condition for the current year. If a tax position does not meet the minimum statutory threshold to avoid the incurring of penalties, an expense for the amount of the statutory penalty and interest, if applicable, shall be recognized in the Part

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