According to The Barclay Group, in 2000 there were $38 billion placed in Managed Futures investments. By the first quarter of 2016 that number increased over 700%, to $276 billion dollars – making managed futures one of the fastest growing investment classes today!
Managed Futures programs offered by Powerline provide clients the ability to participate in a broad array of professionally managed commodity investments. These programs have attracted interest and seen strong growth from institutional, corporate and individual investors over the last decade and a half as a means of potentially enhancing overall portfolio performance, while at the same time lowering risk through diversification into an asset class that is often not correlated with traditional stock and bond market performance.
The benefits of managed futures within a well-balanced portfolio include:
- Potential to lower overall portfolio risk;
- Opportunity to enhance overall portfolio returns;
- Broad diversification opportunities;
- Opportunity to profit in a variety of economic environments (higher, lower or sideways market trend); and
- Limited losses due to a combination of flexibility and discipline.
One of the major arguments for diversifying into managed futures is their potential to lower portfolio risk. Such an argument is supported by many academic studies of the effects of combining traditional asset classes with alternative investments such as managed futures. Dr. John Lintner of Harvard University is perhaps the most cited for his research in this area.
Managed futures are a highly flexible alternative investment traded on many financial and commodity markets around the world. By broadly diversifying across markets, managed futures may simultaneously profit from price changes in stock indices, treasury futures or bond futures, and currencies, as well as from diverse commodity markets having virtually no correlation to traditional asset classes such as the stock market. As an asset class, managed futures programs are largely inversely correlated with stocks and bonds.Hence, combining managed futures with these other asset groups may optimize your allocation of investment capital. (Read Surveying Single Stock Futures for more information.)
In this arena, Powerline’s years of experience in the commodity marketplace garner it a unique perspective on evaluating, selecting and managing programs for the specific needs of our individual clients. Contact Powerline to learn how managed futures can be put to work for you!
Please note: Investors should be aware that trading futures and options involves substantial risk of loss and is not suitable for all investors.