Managed Futures refer to professionally managed accounts, traded by registered Commodity Trading Advisors (CTA’s). CTA’s can go long or short, in a wide range of instruments including grains, meats, metals, interest rates, currencies, energies, and stock indices. They trade a broad range of strategies in varying time frames and offer diversification and opportunity for enhanced returns.
Managed futures traders are typically looking to capitalize on market trends that persist from supply/demand imbalances in the marketplace. With the ability to go both long and short, managed futures have the potential to profit in any economic
environment, and often perform best in crisis periods or uncertainty.
The potential to increase returns while reducing volatility
Managed futures offer a smart way to balance risk with returns. When added to a traditional stock and bond portfolio, managed future may be able to reduce overall portfolio risk and volatility while simultaneously enhancing performance, as shown in the table below.
| 100% US Equities1 | 100% Managed Futures2 | Traditional (60% Equities1 / 40% Bonds3) | 80% Traditional / 20% Managed Futures2 | |
|---|---|---|---|---|
| CAGR | 9.65% | 7.09% | 8.69% | 8.55% |
| MaxDD | 50.95% | 11.94% | 29.86% | 22.68% |
| Std Dev | 14.64% | 9.04% | 9.29% | 7.35% |
| MAR | 0.19 | 0.59 | 0.29 | 0.38 |
| Sharpe | 0.45 | 0.45 | 0.61 | 0.76 |
Period: 1990-2014. Data used:
1. US Equities: S&P 500 Total Return
2. Managed Futures: Barclay BTOP-50 for period 1990-1999, Newedge CTA Index 2000-2014
3. Bonds: Vanguard Total Bond Index Fund (VBMFX)
Diversification beyond stocks and bonds
Managed futures have virtually no correlation to traditional asset classes such as stocks, bonds, cash, and real estate, making them a powerful tool in your diversification arsenal. And with over 150 different markets worldwide, managed futures make global diversification simple.
Investment flexibility during up and down markets
Managed futures have the potential to limit losses and generate strong returns even when the stock markets are falling or in crisis. During periods of economic stress — inflation, deflation or recession — managed futures can take long or short positions to capture positive returns.
Managed Futures Database
Access our managed futures database to search through hundreds of programs. Check each program’s details — strategy description, full performance results, stats and charts. Build your personalised watchlists and portfolios of the programs you want to track.