Managed Accounts
Most portfolio analysts now recommend a much broader asset diversification into a spectrum of non-correlated investments including futures, futures options, commodities and foreign exchange. Index Futures Group offers a number of different managed products that may fit into your portfolio.
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Trading futures and options involves the risk of loss. You should consider carefully whether futures or options are appropriate to your financial situation. You must review the customer account agreement and risk disclosure prior to establishing an account. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment.
Opportunity to Lower Portfolio Risk and Enhance Returns
Adding Managed Futures to a balanced portfolio has the potential to decrease portfolio volatility and increase potential returns. Risk reduction is possible because managed futures can trade across a wide range of global markets that have virtually no long-term correlation to most traditional asset classes. Moreover, managed futures generally perform well during adverse economic or market conditions for stocks and bonds, thereby providing excellent downside protection in most portfolio.
The addition of managed futures products to a traditional portfolio can improve overall investment quality while also potentially reducing risk. This has been substantiated by an extensive bank of academic research, beginning with the landmark study by Dr. John Lintner of Harvard University titled The Potential Role of Managed Commodity Financial Futures Accounts (and/or Funds) in Portfolios of Stock and Bonds. In it he wrote, “…the combined portfolios of stocks (or stocks and bonds) after including judicious investments…in leveraged managed futures accounts show substantially less risk at every possible level of expected return than portfolios of stocks (or stock and bonds) along”.
Broad Diversification Opportunities
Managed futures are highly flexible financial instruments traded on many regulated financial and commodity markets around the world. By broadly diversifying across global markets, managed futures can simultaneously profit from price changes in stock, bond, currency and money markets, as well as from diverse commodity markets having virtually no correlation to traditional asset classes.
Opportunity To Profit in a Variety of Economic Conditions
Managed futures trading advisors can generate profits in both bull or bear markets due to the ability to buy futures positions in anticipation of rising markets or sell futures positions in anticipation of falling markets. Trading advisors are able to go long or short with equal ease. This, coupled with virtual non-correlation with most traditional asset classes, have resulted in managed futures performing well relative to traditional asset classes during adverse conditions for stocks and bonds.
Potential To Limit Losses Due To A Combination of Flexibility and Discipline
Drawdowns, or the reduction a fund might experience during a market retrenchment, are an inevitable part of any investment. However, because managed futures trading advisors can go long or short – and typically adhere to strict stop-loss limits – managed futures funds have limited their drawdowns more effectively than many other investments. (The use of stop-loss orders may not necessarily limit losses under certain market concitions.) Additionally, managed futures generally have shorter recovery times from drawdown periods. This is due in part to the ability to use short trading to take advantage of falling markets, as well as the fact that managed futures often have lower losses to recover
Liquidity
Managed Futures accounts can provide daily liquidity, if necessary. Most other investments require lockups for as long as two years.
Transparency
Futures are publicly traded instruments whose price is indisputable. Most futures markets trade more than 20 hours per day, so investors know what positions they have and what they are worth.
For more info:
Our Education page has some downloadable resources.
Take a look at some of the specific Managed Products we offer.
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