Managed Futures:
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"Portfolios...including judicious investments...in leveraged managed
futures accounts show substantially less risk at every
possible level of expected return than portfolios of stock (or stocks
and bonds) alone." Dr. John Litner Harvard University |
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1. Benefits of a Managed Futures
Account within a well-balanced portfolio: 2. Opportunity for reduced portfolio volatility risk 3. Potential for enhanced portfolio returns 4. Ability to profit in any economic environment 5. Opportunity to easily participate in global markets (Above quoted from Chicago Board of Trade pamphlet, "Portfolio Diversification Opportunities, Managed Futures, 1998 edition) University of Massachusetts, Center for International Securities and Derivatives Markets: The benefits of Managed Futures Update 2006 Managed Futures online brochure from the Chicago Board of Trade
About There is a massive universe of CTA's from which to choose. The obvious question you need to ask is which CTA should be chosen? |
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To help you make the best decision to open your managed account today click the links below to increase your knowledge base. Click here for Free Commodity Trading Advisor Performance Reports Click for Free information to increase your knowledge of managed futures accounts Managed Account Commodity Trading Advisor Links: Click
here for risk disclosure and
performance for Sona Trading
(diversified trend following CTA) Managed Mind: Patrick Sullivan President GLTC In reading Jack D. Schwager's book on " Managed Trading Myths and Truths" the main principle I have gained from reading the book is that past performance even of CTA's with good returns is no indication that those CTA's will continue to perform in the future. However, the other principle insight I gained was that there is a degree of relative predictability that a given CTA who is "risky" will likely continue to be "risky" in the future and a CTA who trades less "risky" will likely continue to be less "risky" in the future. A key factor in "riskiness" is "leverage, the amount of contracts traded per market". " The fact that past riskiness, as measured by the standard deviation, is such a reliable indicator of future riskiness is not really surprising. After all, risk levels are directly correlated with the amount of leverage used- a factor that is totally controllable by the CTA." (taken from Managed Trading, Myths & Truths, Jack D. Schwager, pg. 154). You should note that just because a CTA demonstrates less riskiness does not necessarily indicate that they will have positive returns. However, in my experience of futures and options markets trading, typically those traders who are the most risk adverse and vigorously control the risk are usually the traders who benefit from the market in the long run. As the saying goes " the best offense is a good defense". Typically a trader who can keep losses manageable during those periods when market conditions may not be conducive to their trading approach will most likely be able to still be in the market when conditions change and thereby potentially reap positive returns. Therefore the primary factor to picking a Managed Fund or CTA in my opinion is to identify those CTA's who demonstrate less risky behavior, i.e. do not over leverage etc. Managed Mind Archives (work in progress) A Futures & Options, Financial & Commodities Consulting and Brokerage Firm |