What advisers should know about managed-futures funds

Making a case for non-correlated investment strategies, in particular, trend following

No one likes to pay for insurance but everyone likes to have a policy in place when something unexpected happens.

The same can be said for adding non-correlated, or negatively correlated, asset class to an investor’s portfolio. When the market is moving higher day after day, these assets are almost certain to underperform. But when the market turns, as we have seen again recently, it can turn quickly and emphatically – non-correlated asset classes demonstrate their value. The challenge for financial advisers is to help clients understand this, and to position theses non-correlated strategies properly within a portfolio.

THE ADDITION OF MANAGED FUTURES TO A PORTFOLIO DOES NOT MEAN THAT A PORTFOLIO WILL BE AUTOMATICALLY PROFITABLE, THAT IT WILL NOT EXPERIENCE SUBSTANTIAL LOSSES OR VOLATILITY AND THAT THE RESULTS OF STUDIES CONDUCTED IN THE PAST MAY NOT BE INDICATIVE OF CURRENT TIME PERIODS OR OF THE PERFORMANCE OF ANY INDIVIDUAL CTA.

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DIRECT INDEXING
TREND FOLLOWING
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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.