Managed futures is a term used to encompass an investment vehicle made up of professional money managers known as commodity trading advisors. These money managers use the global futures, options and foreign exchange markets as their investment medium. Assets under management grew from $500,000 in 1980 to over $330 billion by 2013. When a judicious investment in managed futures are added to a portfolio of stocks and bonds, the overall volatility risk of the portfolio may be reduced with the potential for enhanced returns. Other benefits from managed futures investments are numerous and include:
- Low correlation to stock and bond markets
- The ability to profit in both bull and bear markets
- Low transaction costs relative to stock and bond transactions
- Access to global markets
- Market and contract diversification
- Potential hedge against inflation and deflation
- Liquidity and efficiency of futures market places
- Interest Income
- Regulatory Oversight and Control
- Integrity of Global Exchanges
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