What Are Managed Futures?

Managed Futures, commonly associated with Commodity Trading Advisors (CTAs), is a subclass of alternative investment strategies which take positions and trade primarily in futures markets. Using futures contracts and sometimes options on futures contracts, they follow directional strategies in a wide range of asset classes including fixed income, currencies, equity indices, soft commodities, energy and metals. Although there are many types of Managed Futures strategies, the most common type is systematic trend following. Systematic trend following strategies employ technical methods to identify and profit from price trends in financial markets. This approach can vary in the level of discretion in the trading decisions, time horizon and risk management approaches.

Why Invest in Managed Futures?
  • 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.

  • 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.

  • 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.

  • 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. Moreover, they often do so with less volatility and smaller draw-downs than other asset classes. View an Illustration - CME Critical Events >>

  • 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.

  • Successful institutions use them.

    Pension Plan Sponsors, Endowments and Foundations have long used Managed Futures to generate returns in excess of the S&P 500.

  • Commodity Trading Advisors (CTAs), Pool Operators (CPOs), and Managed Futures Mutual Funds have access to a wide variety of global futures products that are liquid and transparent.

    There are more than 150 liquid futures products across the globe, including stock indexes, fixed income, energies, metals, and agricultural products.

  • The CTA/CPO/Managed Futures Mutual Fund community is regulated.

    Trading in a regulated marketplace builds the credibility and trustworthiness of the CTA/CPO/Managed Futures Mutual Fund community.

  • Risk Management and Clearing

    CME Clearing institutes some of the most sophisticated risk management practices in the financial world. For more than 100 years, CME Clearing has provided services that substantially mitigate the risk of clearing member failure. CME Clearing has provided the resources to ensure the performance of every contract on our exchanges for more than a century.

  • Overall industry growth has been exceptional.

    In the last 35 years, assets under management for the Managed Futures industry have grown 1000 fold. Current assets under management stand at over $310 billion. View an Illustration - BarclayHedge CTA AUM* >>


**This information was taken from 10 Reasons to Consider Managed Futures by the CME Group.

Who Invests in Managed Futures?

Institutional investors have been investing in Managed Futures since the mid-1980s. Since then, assets under management in Managed Futures programs have grown to $200 Billion. Today, a wide range of investors avail themselves of Managed Futures, from retail to high-net worth to institutional investors.

  • Investors
    • Individuals
    • Family Offices
    • Registered Investment Advisors (RIAs)
    • Fund of Funds
  • Asset Managers
    • Public Pension Funds
    • Endowments
    • Foundations
  • Companies
    • Corporate Treasury Departments
    • Corporate Pension Funds
    • Insurance Companies
  • Governments
    • Central Banks
    • Sovereign Wealth Funds

Learn more about Managed Futures

*In regards to these promotional materials from the CME Group, there are limitations associated with managed futures indices. In particular, an index does not represent the entire universe of all CTAs. Additionally, individuals cannot invest in an index itself and actual rates of return may be significantly different and more volatile than those of the index.

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