Managed Futures For The Modern Portfolio
"Why high net worth institutions and individuals should not be the only investors for Managed Futures."
In these tough economic times individual investors have seen their portfolios decline at the rate of 30 - 40 % or more. Managed futures, as an asset class, is increasingly being recognized as an important investment that may potentially enhance a portfolio's return, while lowering the overall risk and volatility. According to the Chicago Board of Trade, in 2002 an estimated $45 billion was under management by trading advisors. Just two years later in a study released by the Barclay Group, money under management during the 4th quarter 2004 had grown to $131.9 billion. Today, that total is over $200 billion. This exponential rate of growth has continued as asset managers globally begin to recognize the values inherent in incorporating managed futures portfolios into their overall investment portfolios.
Individual investors can benefit from the diversification of wide variety of global markets including agricultural products, bonds, currencies, financial instruments, metals, energies and stock indexes.. Research from some of the major investment firms have shown that investing 10 -20-% of their portfolio in Managed Futures can vastly improve their performance. A study by Goldman Sachs covering a 25 year period concluded that "allocating only 10% of a securities portfolio to commodities, investors can vastly improve their performance." Chicago Mercantile Exchange (CME) a preeminent futures exchange study states " Portfolios with as much as 20% of assets in managed futures yeilded up to 50% more than a portfolio of stocks and bonds alone."
Not only does managed futures give you global diversification, there can be potential tax benefits over a traditional stock portfolio. Managed Futures is suitable for many types of tax deferred accounts including IRA, 401(k), Roth IRA and SEP. Tax benefits of futures profit and loss are treated as 60% long term capital gains and 40% short term capital gains. No matter the holding period. (minutes,hours,days or months) As with traditional stocks you will have to hold the security for mare than a year to benefit from the short term capital gains. Long term capital gains tax is up to 15% and short term capital gains is up to 35%.
Conclusion
Thank you for taking the time to review this article. We hope it is useful to you. The Transworld Futures.com Managed Futures Division continues to enhance its long-term relationships with the top performing CTAs globally, while simultaneously engaging in the search for new, emerging CTA talent. Transworld Futures.com continually reviews the qualifications of the top trading advisors and will gladly assist you in selecting the right match for your particular account size, risk tolerance, market focus and trading style. To learn more about the trading results, styles, and strategies of recommended advisors in managed futures and to request information on other fund products from Transworld Futures.com, please contact:
Transworld Futures Managed Division 877-843-4519
or by email
Jimmy Tintle at jimmy@transworldfutures.com
CFTC RISK DISCLOSURE STATEMENT
THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.
IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF THE PRINCIPAL RISK FACTORS AND EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR ("CTA").
THE REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") REQUIRE THAT PROSPECTIVE CUSTOMERS OF A CTA RECEIVE A DISCLOSURE DOCUMENT WHEN THEY ARE SOLICITED TO ENTER INTO AN AGREEMENT WHEREBY THE CTA WILL DIRECT OR GUIDE THE CLIENT'S COMMODITY INTEREST TRADING AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED. THIS DOCUMENT IS READILY ACCESSIBLE AT THIS SITE. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS. THEREFORE, YOU SHOULD PROCEED DIRECTLY TO THE DISCLOSURE DOCUMENT AND STUDY IT CAREFULLY TO DETERMINE WHETHER SUCH TRADING IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
YOU ARE ENCOURAGED TO ACCESS THE DISCLOSURE DOCUMENT BY CLICKING THE LINKS PROVIDED UNDER EACH OF THE RESPECTIVE CTAS HIGHLIGHTED ABOVE. YOU WILL NOT INCUR ANY ADDITIONAL CHARGES BY ACCESSING THE DISCLOSURE DOCUMENT. YOU MAY ALSO REQUEST DELIVERY OF A HARD COPY OF THE DISCLOSURE DOCUMENT, WHICH WILL ALSO BE PROVIDED TO YOU AT NO ADDITIONAL COST. THE CFTC HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN ANY OF THESE TRADING PROGRAMS NOR ON THE ADEQUACY OR ACCURACY OF ANY OF THESE DISCLOSURE DOCUMENTS.
OTHER DISCLOSURE STATEMENTS ARE REQUIRED TO BE PROVIDED TO YOU BEFORE A COMMODITY ACCOUNT MAY BE OPENED FOR YOU.
