A managed futures account offers investors the opportunity to diversify their overall portfolio by gaining exposure to over 60 markets worldwide. Many funds even diversify further by investing
in multiple trading advisors with different
trading approaches.
The advantages of investing in managed futures within a well-balanced alternative portfolio include:
Reduce Portfolio Volatility
There's a relatively low correlation between the performance of managed futures and stock prices or interest rates. Dr. Harry Markowitz, Nobel Prize economist, developed Modern Portfolio Theory, suggesting that more efficient investment portfolios can be created by diversifying among asset categories with low to negative correlations.
Ability to Profit Regardless
of Market Direction
Managed futures trading advisors can take advantage of price trends. Unlike other asset classes, where profits depend solely on price appreciation, opportunities in commodity futures trading exist in both rising and falling markets. They can buy futures positions in anticipation of a rising market or sell futures positions if they anticipate a falling market.
Global Portfolio Opportunities
Managed futures programs can participate in markets around the globe, including stock indexes, financial instruments, agriculture products, precious metals, currencies, and energy markets. This provides trading advisors with limitless opportunity for profit potential and risk reduction.
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