Diversify beyond the traditional asset classes.

Managed Futures are an alternative asset class that has achieved strong performance in both up and down markets, exhibiting low correlation to traditional asset classes, such as stocks, bonds, cash and real estate.

managed futures vs stocks

Sources: CME Group Brochure “10 Reasons to Consider Adding Managed Futures to your Portfolio”.

When viewed as an independent investment, managed futures have compared favorably with U.S. stocks and bonds, as well as international stocks, over the past decade.

A $10,000 investment in the Dow Jones-AIG Commodity Index five years ago would have returned more than 50% through Sept. 30th — a stellar showing relative to stocks and bonds. The divergence helps explain pension funds´ growing interest in the material world.

 

managed futures graph

The potential for higher performance returns using managed futures compares well with other asset classes in terms of risk.

  • One way to compare risk is to measure the magnitude of the worst cumulative loss in value of an investment from any peak in performance to the subsequent low.
  • This worst-case, peak-to-valley scenario is called a drawdown in the futures industry.

 

managed futures decline

As this Chart shows, since 1989 the worst drawdown Managed Futures have had as an asset class is -15.7%And when compared to time periods when stocks have shown their worst drawdowns, managed futures have shown positive returns.

Barclay CTA Index Disclaimer

The Barclay CTA Index is a leading industry benchmark of Commodity Trading Advisors. There are currently 326 programs included in the calculation of the Barclay CTA Index, which is underweighted and rebalanced at the beginning of each year. To qualify for inclusion in the CTA Index, an advisor must have four years of prior performance history. Additional programs introduced by qualified advisors are not added to the index until after their second year. These restrictions, which offset the high turnover rates of trading advisors as well as their artificially high short-term performance records, ensure the accuracy and reliability of the Barclay CTA Index.