Managed Futures
Diversification benefits and the modern portfolio theory
Potential tax benefits managed futures versus stocks
According to the Tax Act of 1981, short-term profits in futures are treated as 60% long-term (therefore being subject to a maximum tax of 15%), and 40% short-term (normal taxable income). On the other hand, short-term trading profits in stocks (stocks held less than one year) are treated as 100% short-term.This favorable tax treatment for futures can translate for those in the upper tax brackets, saving as much as 30% on taxes on short-term gains in futures versus stocks. Alternative investments such as Managed Futures are not suitable for all investors.
Managed futures should only be used with speculative capital, and that the investment not exceed 20% of investable assets or 10% of a client's overall net worth.
It is strongly recommended that any investment tax considerations should be reviewed with a qualified tax professional prior to investing.
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Learn More about Managed Futures
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