Managed futures—sometimes known as managed accounts—are investments managed by a professional money manager known as a Commodity Trading Advisor (CTA).

These advisors manage client assets on a discretionary basis using global futures markets. Managed futures allow investors to invest in futures without having the day-to-day responsibilities of managing and placing trades. Additionally managed futures provides a number of benefits including diversification and non-correlation from traditional investments such as stocks and bonds, investing in commodities, currencies, and equities globally.

Key benefits of managed futures include:

  • Broad Diversification Opportunities
    The opportunity to profit in diverse investments beyond traditional assets such as currencies, agriculture, energy, metals and a wide variety of instruments on regulated exchanges globally.
  • Absolute Returns
    Absolute return strategies enable CTAs to produce returns regardless of market direction, employing a broader toolkit of investment instruments. 
  • Non-correlation to Stocks and Bonds
    A diversified managed futures program potential for profit or loss does not directly correlate to movements in traditional investments such as stocks and bonds.  

Additional benefits of managed futures include:

  • Not only is there a strong case for managed futures in dismal economic periods, but these vehicles also have exhibited relative consistency throughout market cycles (exhibiting absolute return).
  • CTAs are able to employ different trading strategies, trade additional markets, and implement separate trading time frames than traditional investments.
  • Managed futures, via investments in individually managed accounts, offer enhanced transparency and liquidity over traditional alternative investments.
  • Reduces the burden of tracking and trading individual investments by having your account traded by a professional, licensed Commodity Trading Advisor.

Are Managed Futures for Me?

Managed futures can offer almost all portfolios the benefit of diversification, giving them potentially greater returns while reducing risk. However, every investor should consider the following factors.

Managed futures are not a short-term investment.

It is important to note that managed futures should be considered a long-term investment and one that should be added to a traditional portfolio for greater diversification. They should not be viewed as investments that should be traded in and out of quickly.

All investments carry risk, including managed futures.

As with any investment, including stocks, bonds, and real estate, managed futures carry a certain level of risk. It is important to understand these risks and review track records, the use of leverage, and disclosure documents. Managed futures may not be right for everyone. It is important to understand all the risks involved before investing in managed futures.

For more information, contact a Novus Investments registered futures broker.

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