Managed Futures

As commodity futures have become more widely accepted as an asset class, public interest in managed futures accounts has exploded. Since 1980 assets in managed futures has grown from a mere $310 million, to over $206 billion in 2007, doubling since 2003.

A major reason for the growing popularity of managed futures is it allows the investor to diversify their portfolio in an asset class that has a low correlation to the world equity markets. When an investor elects to open a managed futures account they are given an entree into the global futures markets enabling them to trade in a wide array of futures contracts.

Managed futures are easy to understand. An investor choosing to use managed futures selects one or more Commodity Trading Advisors (CTA’s) that best conform to the goals of the investor. The investor gives the CTA power to trade the account on a discretionary basis and the CTA enters trades on behalf of the customer. The CTA manages the trades, freeing the investor to go about their normal business not needing to constantly monitor the trade(s).

Features that managed futures traders find noteworthy:

• Opportunity for Growth Independent of the Equity Markets
• Portfolio Diversification
• Exposure to a Wide Array of Commodity Futures Contracts
• Selection of a CTA(s) consistent with individual goals