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“Portfolios…including judicious
investments…in leveraged managed futures accounts show substantially less
risk at every possible level of expected return than portfolios of stocks
(or stocks and bonds) alone.” - Dr. John Litner,
Harvard University
WHAT ARE
MANAGED FUTURES?
Managed Futures
describe an industry made up of professional money managers known as
Commodity
Trading Advisors
(CTAs).
With practically a zero-correlation with stocks, CTAs can add profound diversification to an
overall investment portfolio by using global futures markets as an
investment medium, taking positions based on expected profit potential.
Knowledgeable investment
professionals have been using managed futures for more than 30 years.
Institutional Investors, such as corporate and public pension funds,
endowments, trusts and banks, have made managed futures part of a well-diversified portfolio.
Managed Futures as an
asset class are increasingly being recognized as an important investment
alternative that can potentially enhance returns and lower the overall
volatility of a portfolio.
CTAs are regulated by
the National Futures Association and the Commodity Futures Trading
Commission. All stated rates of return must meet stringent regulatory
standards.
The primary source of
income for most CTAs is an incentive fee that can only be earned by
producing ongoing new profits for a customer's account (net of all costs).
In October 2004, it is
estimated that over $117 billion dollars was under management by trading
advisors.*
*Source Barclay Trading Group
The risk of
trading futures, options, and foreign exchange can be substantial. Past
performance is not necessarily indicative of future results. The factual
information of this report has been obtained from sources believed to be
reliable, but is not necessarily all-inclusive and its accuracy can not be
guaranteed.
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