Benefits of Managed Futures
1. Diversify beyond the traditional asset classes.
Managed Futures are an alternative asset class that has achieved strong performance in both up and down markets, exhibiting low correlation to traditional asset classes, such as stocks, bonds, cash, and real estate.
2. Reduce overall portfolio volatility.
In general, as one asset class goes up, some other asset class goes down. Managed Futures invest across a broad spectrum of asset classes with the goal of achieving solid long-term returns.
3. Increase returns and reduce volatility.
Managed Futures, as well as commodities, when used in conjunction with traditional asset classes, may reduce risk, while at the same time potentially increasing returns.
4. Returns evident in any kind of economic environment.
Managed Futures may generate returns in bull and bear markets, boasting solid long-term track records despite economic downturns.
5. Strong performance during stock market declines.
Managed Futures may do well in down markets because they employ short-selling and options strategies that allow them to profit in such markets.
6. Successful pension plan sponsors use them.
Pension plans have long used Managed Futures to generate returns in excess of the S&P 500.
7. Commodity Trade Advisors (CTAs) and Pool Operators (CPOs) have access to a wide variety of global futures products that are liquid and transparent.
There are more than 150 liquid futures products around the globe, including stock indexes, fixed income, energies, metals, agricultural products, and more.
8. CTA /CPO community is regulated and trades on regulated futures exchanges.
Trading in a regulated marketplace builds the credibility and trustworthiness of the CTA/CPO community.
9. Risk management and clearing.
CME Clearing institutes some of the most sophisticated risk management practices in the financial world. As such, it has performed flawlessly during times of economic turbulence. In more than a century, CME Clearing has never experienced a default.
10. Overall industry growth has been exceptional.
In the last 30 years, assets under management for the Managed Futures industry have grown 800 fold (80,000 percent).
There is a risk of loss when trading futures. Futures trading is not appropriate for all investors.