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Why Managed Futures?
A Brief History of the Asset Class
In recent years, managed futures have witnessed explosive growth as institutions and private investors have sought to diversify their portfolios beyond traditional investments:
Growth of Managed Futures: Money Under Management ($ billion)
January 2000 – March 2012
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS. YOU CAN LOSE MONEY IN A MANAGED FUTURES PROGRAM.
Source: Barclay Trading Group, Ltd.
As the graphic above illustrates, managed futures are not a new investment. Trading contracts have a long history. In 1848, the Chicago Board of Trade became the nation’s first organized exchange to offer futures contracts. Since the 1970s, individual investors have been able to participate in investment funds that include managed futures.
Investors have been drawn to managed futures because of the global nature of the futures markets, which has broadened the opportunity for profit. In addition, managed futures trading programs can be long, short, or neutral in a particular market, allowing investors to potentially profit in rising and falling markets. By allocating up to 10% of a portfolio to managed futures over a longer-term timeframe, investors can potentially benefit from increased returns and smoother portfolio performance.
Risk management and investor security are paramount priorities in the managed futures industry. Managed futures are one of the most highly regulated investments. The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) work in conjunction to ensure the integrity of the futures marketplace, and to foster open, competitive, and financially sound futures markets.
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