Managed futures are simply accounts where professional futures traders manage accounts for clients by placing trades in the futures and options markets. These registered professionals are Commodity Trading Advisors (CTAs) and have their own specific strategies for trading the markets. An overview of their strategies are provided in their Disclosure Documents and Tear Sheets, along with their track records of past performance.
Managed Futures can be used as a stand-alone investment, but they are typically used to offer greater investment portfolio diversification. Managed futures typically are non-correlated with equites, because they often trade a variety of futures market categories like metals, oils, grains, livestock, currencies and financial markets. This feature can provide less risk exposure to an individuals investment portfolio.
Unlike stocks and mutual funds, it is a little more difficult to research CTAs and find information on them. We provide access to a service called Autumn Gold that provides and overview of 300+ CTAs with their monthly and annual returns and drawdowns. It is a little more complicated to find the best or most suitable CTAs for a client. It takes experience and more detailed knowledge to analyze the numbers, trading strategies and market conditions. This could be why managed futures havent become a mainstream investment class for the masses, but have become very popular for institutional investors.
Once an investor decides upon a CTA or portfolio of CTAs, the process to invest actual money is not very complicated. A futures trading account will need to be opened with one of the eight clearing firms where Foremost does business. This is the account where the CTA will place trades in the futures markets. There is some other paperwork that gives trading authorization to the CTA, receipt of the disclosure document and other forms required for the CTA.
Trading futures, options on futures, retail off-exchange foreign currency transactions (Forex), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.
The addition of managed futures to a clients portfolio does not mean that a portfolio will be profitable or that it will not experience substantial losses and that the studies conducted in the past may not be indicative of current time periods or of the performance of any individual CTA.
ABOUTDisclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (Forex), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by Futures Buzz shall be construed as a solicitation. Futures Buzz does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Futures Buzz. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Phone calls to and from Futures Buzz or its DBAs may be recorded. Email sent through the internet is not secure. Email is not private and is subject to review by the Firm, its officers, agents, employees, and regulators. Futures Buzz is a DBA of Foremost Trading, LLC.
/* unvisited link */ a:link color: blue; /* visited link */ a:visited color: red; /* mouse over link */ a:hover color: yellow; /* selected link */ a:active color: ffffff;
Write CSS OR LESS and hit save. CTRL + SPACE for auto-complete.