What Are Managed Futures?
Managed Futures refers to professional money managers who are known as "commodity trading advisors" (CTAs). CTAs are required to register with the U.S. government's Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
Managed futures have been used successfully by investment management professionals for more than 30 years. Institutional investors looking to maximize portfolio exposure continue to increase their use of managed futures as an integral component of a well diversified portfolio.
With the ability to go both long and short, managed futures are highly flexible financial instruments with the potential to profit from rising and falling markets. Moreover, managed future funds have virtually no correlation to traditional asset classes, enabling them to enhance returns as well as lower overall volatility.With the ability to go both long and short, managed futures are highly flexible financial instruments with the potential to profit from rising and falling markets.
How Managed Futures Diversify a Portfolio
Managed futures can further diversify your entire investment portfolio. By adding managed futures to your investment portfolio, you may lower the overall risk to your portfolio and potentially increase the overall returns.
Futures positions entered into by CTAs on behalf of investors may involve going long or short in futures contracts in areas such as metals, grains, equity indexes, soft commodities, foreign currency and U.S government bond futures.
Historic Performance of Managed Futures
Managed futures are professionally managed investments that concentrate on the futures and commodity markets. By following trends, the strategy can result in profits when commodities are trending higher or lower. The bigger the trends, the better.
Are Managed Futures right for you? Contact a Kottke Associates professional to learn more.