Managed Futures

Managed futures are an alternative asset that achieved strong performance in both up and down markets, exhibiting low correlation to the traditional asset classes, such as stocks, bonds, cash, and real estate.

Who We Serve

ADVISORS

Add managed futures (an often-uncorrelated investment) to your product offering.

INVESTORS

Looking for passive participation in the futures market

CTAs, CPOs, Fund Managers

Seeking a trusted community, to whom they can market their performance and strategies

What are Managed Futures?

Managed Futures Overview

Managed futures are a specialized investment strategy led by Commodity Trading Advisors (CTAs), professionals registered with the Commodity Futures Trading Commission and overseen by the National Futures Association (NFA). These experts employ trading strategies—algorithmic, discretionary, or a mix—to manage client assets across futures markets, including commodities, equity indexes, currencies, and bonds.

Why Choose Managed Futures?

Investors often turn to managed futures for diversification, as these strategies can mitigate portfolio risk during market downturns. Unlike hedge funds, CTAs focus on liquid, transparent futures markets, offering real-time account visibility and reducing exposure to illiquidity and credit risks.

Key Benefits of Managed Futures

Crisis Alpha: Perform well in volatile markets, providing downside protection.
Diversification: Hedge against market declines with uncorrelated strategies.
Flexibility: Profit from both upward and downward trends.

Challenges

Dependence on clear market trends for effectiveness.
High fees that can impact net returns.
Results often tied to market conditions rather than unique managerial expertise.

Evaluating CTAs

Before investing, consider the CTA’s track record, strategies, fees, and risk management practices. Important metrics include drawdowns, annualized returns, and risk-adjusted performance ratios like the Sharpe and Calmar ratios.

Tax Considerations

Managed futures enjoy favorable tax treatment under the 60/40 rule, blending long- and short-term capital gains rates.

Bottom Line

Managed futures offer a dynamic way to diversify your portfolio and manage risk. While they require thorough research and realistic expectations, they can be a valuable tool for investors seeking professional guidance in volatile markets.

RISK DISCLAIMER: There is a significant risk of loss in trading commodities. Past performance is not necessarily indicative of future results. Only risk capital should be used. Losses from commodity investments may be greater than the initial investment(s). Commodity trading is not appropriate for all investors, and a commodity investment must be evaluated in light of the potential for risk of loss as well as the possibility of profit. Please contact your account representative for more information on these risks.