Why do I need Managed Futures in my portfolio?
You don't.
So why do people and institutions invest in them?
Managed Futures are simply an alternative asset class which individual, institution,
pension funds use to diversify their portfolio holdings. Just like you may
own a home, some US stocks, US Bonds and maybe some foreign stocks, managed
futures add to portfolio diversification.
What are Commodity Trading Advisors (CTA's)
CTA's are managed future program managers. Just like a mutual fund has a fund
manager, CTA's manage futures investment programs.
Can't I trade futures myself?
Yes. Just like stocks, simply start an account with a brokerage firm which
offers futures trading.
Why would I have a CTA trade my account when I can do it myself?
The same reason you buy a mutual fund. CTA's are experienced traders who trade
futures professionally.
How long have managed futures accounts been around? I've never heard
of them.
Managed futures have been around since the 70's. Only in the past 10 years
have they become popular with investors looking to diversify out of stock
only holdings.
Who invests in managed futures?
High net worth investors, institutions and pension funds.
What classifies an investor as high net worth?
Most CTA programs have minimum investment levels typically ranging from $50,000
to $500,000. A high net worth investor usually has at least $400,000 in
net liquid assets. Most brokers would suggest not putting more then 25%
of ones investment capital into alternative investments such as managed futures.
What types of futures do CTA's trade:
- Money Market
- Foreign Exchange
- Bond Market
- Equity Index Market
- Soft Commodities
- Metals
- Options
Where can I learn more about managed futures investing?
Join our site (it's free) and start
reading CTA program details. Download their disclosures documents for detailed program
information. We also recommend contacting an experienced broker.
