10 Compelling reasons to consider adding managed futures to your portfolio
By CME Group
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 drawdowns than other asset classes (see chart above).
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.
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Often an initial step for investors is to trustfully forward their latest broker’s statement for us to comment on. Common are also requests to recommend funds out of a 401k program. In both cases fees and sufficient diversification guides our reply.