Hedge funds offer qualified investors a unique partnership. While hedge funds first began as a way to offer investors a balanced – or market-neutral – approach to investing, the methods have evolved through the years. This presentation focuses on one of those strategies, managed futures.

1. Hedge Fund Strategies 101:
Managed Futures Trading (CTAs)
Hedge Fund Fundamentals | January 2015

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Introduction
Hedge funds offer qualified investors a unique partnership, with the ability to invest
alongside them.
While hedge funds first began as a way to offer investors a balanced - or market-
neutral – approach to investing, the methods for delivering returns have evolved
through the years.
This presentation provides a brief overview of some of the strategies used by
hedge funds in the marketplace today.
Topics:
• Investment Strategies
• Managed Futures Trading (CTAs)
• New Hedge Fund Partnerships
• Resources

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Hedge funds offer investors a broad range of investment options. No
two hedge funds are identical, but funds can be categorized broadly by
the type of strategies they employ.
While the individual investment decisions made by each fund vary,
hedge funds are united by the same fundamental goals:
• Portfolio Diversification- Prevents over-concentration in specific assets.
• Risk Management – Helps anticipate and avoid volatility in the marketplace
• Reliable Returns Over Time – Provides opportunities for asset growth
Investment Strategies

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Managed Futures Trading (CTAs)
Managed futures traders–also known as commodity trading advisors (CTAs)
–are able to invest in up to 150 global futures markets.
They trade in these markets using futures, forwards and options contracts in
everything from grains and gold, to currencies, stock indexes and
government bond futures.
Because they can go both long and short they have the ability to make
money in both rising and falling markets.
CTAs have been regulated by the Commodity Futures Trading Commission
(CFTC) since 1974 and are overseen by the National Futures Association
(NFA), a self-regulatory organization.

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Institutional Investors Seeking Out New Hedge Fund
Partnerships
According to Preqin’s 2014 Global Hedge Fund
Report, investors expect to increase hedge fund
allocations to their existing portfolios over the next 12
months.*
Beyond multi-manager funds, public pension funds
are the most active type of institutional investor
seeking new hedge funds, with the proportion of the
total number of fund mandates issued by this group
rising throughout the year. This is in line with recent
growth trends, which indicate that in 2007, around
196 public pension funds invested in hedge funds -
today that number is around 377.
The accompanying chart outlines how investors are
expected to allocate – by strategy – over the next 12
months.**
Source: 2014 Preqin Global Hedge Fund Report
**Data for 2015 will be updated as soon as published.

6. 4 Resources:
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For more information on hedge fund strategies, visit:
1. Managed Funds Association or www.managedfunds.org
2. Hedge Funds 101
3. Hedge Fund Strategies: An Overview of the Various
Investment Strategies Offered by Hedge Funds in the
Marketplace Today
4. Hedge Fund Research Strategy Definitions