What are Managed Futures?
Investment management professionals have been using managed futures for more than 30 years. More recently, institutional investors such as corporate and public pension funds, endowments and trusts, and banks have made managed futures part of a well-diversified portfolio. In 2001, it was estimated that over $35 billion was under management by trading advisors.
The growing use of managed futures by these investors may be due to the increased institutional use of the futures markets. Portfolio managers have become more familiar with futures contracts. Additionally, investors want greater diversify in their portfolios. They seek to increase portfolio exposure to international investments and nonfinancial sectors, an objective that is easily accomplished through the use of global futures markets.
The term managed futures describes an industry made up of professional money managers known as commodity trading advisors (CTAs). These trading advisors managed client assets on a discretionary basis using global futures markets as an investment medium. Trading advisors take positions based on expected profit potential.
This information was copied from Portfolio Diversification Opportunites printed by the Chicago Board of Trade.
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