What are Managed Futures?
Managed Futures are professionally managed investment portfolios that allow investors to simultaneously participate in multiple global market sectors such as foreign exchange, energies, metals, interest rates, equity indices and commodities. These investment programs are run by professional money managers or Commodity Trading Advisors (CTAs), who use established portfolio and risk management techniques to manage their global portfolios.
How can Managed Futures help my investment portfolio?
A key benefit of managed futures programs is their low correlation to traditional equity and bond investments. This is important because well constructed portfolios consist of investments or asset classes that do not move in tandem with each other or in more technical terms are not correlated to each other. Low correlated investments are expected to perform differently under the same economic events and market forces.
Managed futures provide returns distinct from the equity and bond markets primarily due to their ability to participate in movements both to the upside and/or downside in bull and bear markets. These opportunities are not available to traditional stock and bond portfolios.
Our products and services enable our clients to gain exposure to international investments and non-financial sectors on over 100 futures, foreign exchange and forward contracts worldwide.
As a result, managed futures can provide a natural source of diversification to a traditional investment portfolio of equities and bonds.
Who Invests in Managed Futures?
Institutional investors have invested in managed futures since the mid-1980s. Since then, assets under management in managed futures programs have grown to $200 Billion. Today, a wide range of investors avail themselves of managed futures, from retail to high-net worth to institutional investors.
|Public Pension Funds
||Corporate Treasury Dept.
||Corporate Pension Fund
||Sovereign Wealth Funds
||Registered Investment Advisors
||Funds of Funds
What is a Commodity Trading Advisor?
Commodity Trading Advisors (CTAs) are professional investment managers, similar to portfolio managers in mutual funds, who seek to profit from movements in the global financial, commodity and currency markets by investing in exchange traded futures and options and OTC forward contracts.
The true value of the investment programs offered by CTAs is their portfolio construction approach that allows investors to simultaneously participate in multiple global market sectors such as foreign exchange, energies, metals, interest rates, equity indices and commodities. Please see pie chart below.
Investments placed with a CTA are also referred to as Managed Futures because the CTA can manage each client’s individual account, placing trades in the client’s accounts directly on their behalf, like their own personal investment manager.