Why Managed Futures

Most traditional portfolios limit themselves to stocks, bonds, and perhaps real estate.  Managed futures allow investors to tap into other opportunities – agricultural products, energy, metals, equities, interest rates, and currencies – via global futures exchanges.  Because of their use of commodity futures, managed futures managers are sometimes referred to as ‘commodity trading advisors’ (CTAs).

The primary reason to invest in managed futures is the low or negative correlation with traditional asset classes, such as equities and fixed income. Managed futures have typically performed positively during large equity downturns.

Managed futures can profit from changing economic environments by generating returns in both rising and falling markets. Managed futures programs can take long positions in rising markets and short positions in declining markets. Most conventional investments can only profit when markets rise.

Most traditional funds are managed for performance against a defined benchmark, such as a market index.  Managed futures follow an absolute return approach and aim to provide positive returns to investors in all market situations.