The term “Managed Futures” describes an industry made up of professional money managers known as commodity trading advisors (“CTA”). A CTA, in return for management and incentive fees, manage client assets seeking capital appreciation, using global futures markets as an investment medium. These professional managers are (1.) required to be registered with a U.S government agency, the Commodity Futures Trading Commission (“CFTC”), (2.) qualify to become members of the National Futures Association (“NFA”), and (3.) provide a current disclosure document for each prospective investor.
The Benefits of Managed futures within a well-balanced portfolio are:
- The opportunity for reduced portfolio volatility risk. One of the primary benefits of adding a non-correlated managed futures component to a diversified investment portfolio is that it may decrease overall portfolio risk.
- The potential for enhanced portfolio returns. While managed futures can decrease overall portfolio risk, they can also simultaneously enhance overall portfolio performance.
- The ability to profit in any economic environment. Managed futures trading advisors trade both up-trending as well as down-trending markets.
- Global diversification. Diversified trading advisors have over 150 different worldwide markets to use in their programs.