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Managed Futures:
Portfolio Diversification Opportunities
Enhance returns and
lower overall volatility.
CME Group #76677CME Future Broch. pg 09.19.08CYAN MAG YELL BLK pmFCs300 In a world of increasing volatility, CME Group is where the world comes to manage risk across all major asset classes - interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, and alternative investments like weather and real estate. Built on the heritage of CME, CBOT and NYMEX, CME Group is the world's largest and most diverse derivatives exchange encompassing the widest range of benchmark products available. CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York. We provide you with the tools you need to meet your business objectives and achieve your financial goals. And CME Clearing matches and settles all trades and guarantees the creditworthiness of every transaction that takes place in our markets.
CME Group #76677CME Future Broch. pg IFC 09.19.08CYAN MAG YELL BLK CME Group Managed Futures: Portfolio Diversification Opportunities
WHAT ARE MANAGED FUTURES?
The term managed futures describes an INVESTMENT UNIVERSEindustry comprised of professional money managers known as commodity trading advisors (CTAs). These trading advisors TRADITIONAL ASSET CLASSES ALTERNATIVE ASSET CLASSESmanage client assets on a discretionary basis using global futures markets as an Cash Hedge FundsBonds Managed Futuresinvestment medium. Trading advisors Equities Private Equitytake positions based on expected profit Real Estate Credit Derivativespotential. Managed futures are an asset class in their own right, separate from traditional investments such as stocks and bonds.
THE GROWTH OF THE MANAGED FUTURES INDUSTRYIn the last 10 years, 220200assets under 180160)snmanagement for 140oilli 120b nithe managed futures ( 100 DS 80Uindustry have grown 6040an unprecedented 20700%. 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006Source: BarclayHedge, Ltd.
For the purposes of this booklet, managed futures do not include Managed futures have been used successfully by investment management professionals futures accounts where futures are used in risk-management programs or hedge funds. Those funds may be used to dynamically for more than 30 years. Institutional investors looking to maximize portfolio exposure adjust the duration of a bond portfolio or to hedge the currency exposure of a foreign equity portfolio.continue to increase their use of managed futures as an integral component of a well-diversified portfolio. With the ability to go both long and short, managed futures are highly flexible financial instruments with the potential to profit from rising and falling markets. Moreover, managed future funds have virtually no correlation to traditional asset classes, enabling them to enhance returns as well as lower overall volatility.
Recent growth in managed futures has been substantial. In 2002, it was estimated that more than $45 billion was under management by managed futures trading advisors. By the end of 2007, that number had grown to more than $200 billion.
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CME Group #76677CME Future Broch. pg 09.19.08CYAN MAG YELL BLK pm0s1300 cmegroup.com
BENEFITS OF MANAGED FUTURES
CMCEM GEr oGurpo uMpa Mnaagneadg eFdu tFuurteusr ePso rPtofortlifoo lDioiv Deirvsei?rscia?tcioanti oOnp OpoprptourntiutineistiesCME Group Managed Futures Portfolio Diversi?cation Opportunities
By their very nature, managed futures The benefits of managed futures within a well-balanced portfolio include:provide a diversified investment 1. Potential to lower overall portfolio riskopportunity. Trading advisors can participate in more than 150 global 2. Opportunity to enhance overall portfolio returnsmarkets; from grains and gold to 3. Broad diversification opportunitiescurrencies and stock indices. Many funds 4. Opportunity to profit in a variety of economic environmentsfurther diversify by using several trading BadBviEsoErNs wNitEh dEFiffeFrIeTnIt TtSradSi nOg aOpFproF aMc hMes.AA5N. NLAimAGiteGdE loEsDsDes Fd uFUe tUoT aT cUomURbiRnEatEiSonS of flexibility and discipline
BInE thiNs exaEmpFle, IthTe ovSera llO riskF is reMduceAd NAGED FUTURESby almost 82 per... [download for more]
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