Managed Futures

Managed Futures is an investment strategy that involves trading futures contracts and other derivative instruments to create a portfolio. It falls under the category of alternative investments. In this strategy, a portfolio manager uses systematic trading strategies to predict and profit from price movements in financial markets.

Managed Futures typically uses mathematical models, technical analysis, trend following, statistical analysis, and other quantitative methods to make trading decisions. It is applied across various asset classes such as commodities, currencies, bonds, and stocks. The portfolio manager takes positions and manages them based on the perceived market trends or price movements. For example, if a portfolio manager anticipates that the price of a commodity will rise, they may take a long position through futures contracts.

Managed Futures strategy offers the potential for diversification and risk management. It allows trading in different asset classes and adapting to various market conditions. Additionally, this strategy can provide investors with a source of returns that has low correlation with traditional asset classes in financial markets.

Managed Futures can be accessed through hedge funds, mutual funds, or private equity funds managed by professional portfolio managers. By investing in these funds, investors can benefit from the manager’s trading strategies and expertise. However, it is important to note that Managed Futures strategy can involve high risk and may require professional management. Therefore, investors should carefully evaluate and understand the risks involved.

In conclusion, Managed Futures is an investment strategy that aims to profit from financial market opportunities through trading strategies and derivative instruments. It offers the potential for diversification and a source of returns with low correlation, but it can also involve high risk.