3           2.5             210                           Reasons to ConsideR           1.5               1               ...
6.          Successful pension plan sponsors use them.                                                                    ...
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10 Reasons to Consider Adding Managed Futures To Your Portfolio


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10 Reasons to Consider Adding Managed Futures To Your Portfolio

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10 Reasons to Consider Adding Managed Futures To Your Portfolio

  1. 1. 3 2.5 210 Reasons to ConsideR 1.5 1 adding manageD futuReS to youR PoRtfolio 0.5 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 CompaRISon of peRfoRmanCe (01/1980 – 07/2010) +7,000% Managed Futures1 +6,000% $600,680 +5,000% +4,000% U.S. Stocks2 $215,843 +3,000% +2,000% +1,000% International Stocks3 $74,376 0% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 CaSam CISDm Cta equal WeIghteD InDex S&p 500 total RetuRn (index) mSCI WoRlD (index) x x de de x de In x In de In1. 4. d ity te In Diversify beyond the traditional asset classes. Returns evident in any kind of economic environment. ge x od gh de 0 ed P5 x m ei In de H R W m O IT ld ity In BT Co d or Managed Futures are an alternative asset class that has achieved Managed Futures may generate returns in bull and bear markets, SC qu un 0 IW 50 ay BS IE IF G l SC rc U P P FR FR S& S& Ba DJ M H H strong performance in both up and down markets, exhibiting low 0% boasting solid long-term track records despite economic correlation to traditional asset classes, such as stocks, bonds, cash downturns. -10% and real estate. -20%2. Reduce overall portfolio volatility. -30% In general, as one asset class goes up, some other asset class goes -40% 5. Strong performance during stock market declines. Managed Futures may do well in down markets because they down. Managed Futures invest across a broad spectrum of asset employ short-selling and options strategies that allow them to -50% classes with the goal of achieving solid long-term returns. profit in such markets. -60%3. Increase returns and reduce volatility. -70% Managed Futures, as well as commodities, when used in conjunction with traditional asset classes, may reduce risk, while -80% at the same time potentially increasing returns.Visit www.cmegroup.com/mf for tools and additional resources.
  2. 2. 6. Successful pension plan sponsors use them. optImum poRtfolIo mIx (01/1987 – 02/2008)* Pension plans have long used Managed Futures to generate RETURN P.A. 12% 100% Managed Futures returns in excess of the S&P 500. 11% 20% Managed Futures 40% Stocks 10% 40% Bonds Increase returns 7. Commodity trade advisors (Ctas) and pool operators (Cpos) have access to a wide variety 9% 8% 50% Bonds of global futures products that are liquid and 7% 50% Stocks transparent. VOLATILITY There are more than 150 liquid futures products across the 6% 7% 8% 9% 10% 11% 12% globe, including stock indexes, fixed income, energies, metals, Reduce risk and agricultural products. *1) Managed Futures: CASAM CiSdM CTA equal Weighted; 2) Stocks: MSCi World; 8. Cta/Cpo community is regulated and trades on regulated futures exchanges. 3) Bonds: JP Morgan Government Bond Global; Source: Bloomberg Trading in a regulated marketplace builds the credibility and trustworthiness of the CTA/CPO community. annualized annualized Sharpe max Returns Std Dev Ratio Drawdown 9. Risk management and clearing. 50% S&P 500, 50% Lehman 9.68% 7.77% 0.74 -16.07% CME Clearing institutes some of the most sophisticated Gov/Corp risk management practices in the financial world. As such, 40% S&P 500, 40% Lehman it has performed flawlessly during times of economic Gov/Corp, 20% 10.26% 7.51% 0.85 -13.91% turbulence. In more than a century, CME Clearing has S&P/GSCi never experienced a default. 40% S&P 500, 40% Lehman 9.78% 7.03% 0.84 -11.85% Gov/Corp, 20%10. dJ-AiG overall industry growth has been exceptional. Commodity Market indexes: In the last 30 years, assets under management for the Managed – S&P-GSCi (Total/excess/Spot) Return index is a trademark of Standard and Poor’s. – Goldman Sachs Commodity index (GSCi) Futures industry have grown 800 fold (80,000 percent). – dow Jones-AiG Commodity index (dJ-AiGCi)Visit www.cmegroup.com/mf for tools and additional resources.CME Group ManaGEd FuturEs tEaMmark omens David lermanmark.omens@cmegroup.com 312 930 8545 david.lerman@cmegroup.com 312 648 3721Futures trading is not suitable for all investors, and involves the risk of loss. Futures are a leveraged investment, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of moneydeposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect toprofit on every trade. All references to options refer to options on futures.CMe Group is a trademark of CMe Group inc. The Globe logo, CMe and Chicago Mercantile exchange are trademarks of Chicago Mercantile exchange inc. Chicago Board of Trade and CBOT are trademarks of the Board of Trade of the City ofChicago, inc. new York Mercantile exchange and nYMex are trademarks of new York Mercantile exchange, inc. All other trademarks are the property of their respective owners.S&P 500 is a trademark of The McGraw-Hill Companies, inc., and have been licensed for use by Chicago Mercantile exchange inc.“S&P GSCi,” “S&P GSCi index,” “S&P GSCi” (Total/excess/Spot) Return index” and the “S&P GS Commodity index” are trademarks of Standard & Poor’s.“dow Jones”, “AiG,” “dow Jones-AiG Commodity index” and “ “dJ-AiGCi” are registered trademarks or service marks of dow Jones & Company, inc. and American international Group, inc. (AiG).The information within this brochure has been compiled by CMe Group for general purposes only. CMe Group assumes no responsibility for any errors or omissions. Additionally, all examples in this brochure are hypothetical situations,used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and are superseded by officialCMe, CBOT and nYMex rules. Current rules should be consulted in all cases concerning contract specifications.Copyright © 2010 CMe Group. All rights reserved. RT177.2/1000/0910