What Are Managed Futures

Managed futures are a highly flexible alternative investment traded on many financial and commodity markets around the world.  By broadly diversifying across markets, managed futures may simultaneously profit from price changes in stock indices, treasury futures or bond futures, and currencies, as well as from diverse commodity markets having virtually no correlation to traditional asset classes such as the stock market.

 

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Modern Portfolio Theory dictates that a diversified portfolio of uncorrelated assets can provide maximum return with minimal volatility. Managed futures offer investors one of the most uncorrelated and independent investments relative to most other traditional asset classes. Investors should be aware that trading futures and options involves substantial risk of loss and is not suitable for all investors.


Managed Futures Benefits

 

  • Potential to lower overall portfolio risk
  • Opportunity to enhance overall portfolio returns
  • Broad diversification opportunities
  • Opportunity to profit in a variety of economic environments
  • Not tied to ‘buy & hold’ strategy. Can potentially profit in up, down or sideways market trends
  • Limited losses due to a combination of flexibility and discipline.

 

Managed futures are investment products in which professional money managers called Commodity Trading Advisors (“CTAs”) direct investments in the commodities markets utilizing futures and/or options contracts.  While investment management professionals have been using managed futures for more than 30 years, institutional investors such as corporate and public pension funds, endowments and banks have more recently begun to employ managed futures in pursuit of a well-diversified portfolio.

Please note: Investors should be aware that trading futures and options involves substantial risk of loss and is not suitable for all investors.

 

View Our List of Recommended Commodity Trading Advisors

 

Commodity trading is risky. Powerline assumes no liability for the use of any information contained herein. The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.