Managed Futures are an alternative investment asset class that allows investors to simultaneously participate in multiple global market sectors such as currencies, energies, metals, short and long term interest rates, domestics and international stock indices and traditional commodities.

Managed Futures can be a valuable part of an overall asset allocation plan; their purpose is to add portfolio diversification, potentially reduce overall portfolio volatility and potentially achieve higher overall portfolio performance over time when compared to traditional investment portfolios alone. A study by the Chicago Mercantile Exchange (CME) concluded that a portfolio with 20% Managed Futures has less risk than a portfolio of Stocks and Bonds alone. The major benefits with using managed futures are as follows: diversification beyond stocks and bonds, potential for higher portfolio returns, potentially reduced portfolio volatility risk, access to broader market opportunities, potential to profit in any economic condition, professional management, and portfolio liquidity.

BE ADVISED THAT DIVERSIFYING ONE’S PORTFOLIO WITH MANAGED FUTURES DOES NOT GUARANTEE PROFIT, OR PROTECT A PORTFOLIO FROM SUBSTANTIAL LOSSES OR VOLATILITY.

AN INVESTMENT IN MANAGED FUTURES MAY HELP ENHANCE RETURNS AND REDUCE RISK. HOWEVER, THEY MAY ALSO DO JUST THE OPPOSITE AND IN FACT RESULT IN FURTHER LOSSES.

THE RESULTS OF STUDIES CONDUCTED IN THE PAST MAY NOT BE INDICATIVE OF CURRENT TIME PERIODS AND MAY NOT REFLECT THE PERFORMANCE OF ANY INDIVIDUAL CTA.

CTA’s are typically registered with a national regulatory body. CTA’s trading futures in the U.S. are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).

A disclosure document is a description of the CTA’s trading program and procedures that apply to accounts under the CTA’s control. CTA’s are required to provide sufficient disclosure to the investor. The document is required by the NFA and CFTC and describes the fees, trading program, procedures for entry and exit, past performance and rules for the overall trading program. Each disclosure document is different, so please ensure you read the CTA’s disclosure document before investing.

Most CTA’s charge both a management fee and an incentive fee. An incentive fee is based on the CTA’s performance. CTA’s typically charge a 20% incentive fee based on net new profits.

Most CTA’s also charge a management fee to trade the account. Management fees are often around 2%, but can be lower or higher, depending on the CTA.

The funds in your account will be deposited to the clearing firm you open your account with and maintained in a customer segregated funds account.

No. Futures markets, like most markets, tend to be cyclical. Even investors that are successful over the long-term experience periods where there are losses. Although an investor is free to close an account at any time, it is not recommended that you open an account that you don’t plan on maintaining for at least a year. Managed futures are not appropriate for everyone. Only risk capital should be used to invest in managed futures. Risk capital is capital that you do not want to lose, but if you did, your lifestyle would not be changed. We recommend that the amount of money you invest in managed futures be dependent on your risk tolerance and financial goals.

Yes, there are IRA trust custodians who accept futures accounts; they are referred to as self-directed IRA’s. If you do not already have a self-directed IRA which accepts futures trading, you will have to open one with a trust custodian that does. Your Optimus Broker can offer assistance with this process.