Managed Futures
Can be employed as an inflation or deflation hedge
Can be employed as an inflation or deflation hedge
Managed futures trading programs can be designed to profit from major shifts in commodity asset prices and can act as an effective inflation or deflation hedge. The chart on the following page ranks the worst 10 months experience by the equity and debt markets from 1987 to 2003.The blue bars show the performance of CISDM Trading Advisor Qualified Universe Index (formerly known as the MAR Index). This established index tracks the managed futures industry and the peach bars show the performance of a traditional portfolio comprised of 50% stock and 50% bonds.
The chart reveals that managed futures produced positive returns in 9 of the 10 periods. This result clearly demonstrates the true diversification provided by managed futures during the investors' greatest time of need.
Source: Center for International Study of Derivative Markets.
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Key Benefits of
Managed Futures
- 1. Non-correlation to traditional assets
- 2. Potential for enhanced portfolio returns
- 3. Opportunity for reduced portfolio volatility risk
- 4. Opportunities in both bull and bear markets
- 5. Ability to profit independent of the economic environment
- 6. Can be employed as an inflation or deflation hedge
- 7. Provides global diversification into array of liquid markets
- 8. Managed Futures industry is stable and transparent
- 9. Potential tax benefits managed futures versus stocks