Top CTA Managed Futures Accounts by Professionals

All of our recommended CTA's (Commodity Trading Advisors) have been carefully hand-picked.  All of them have documented performance track records of over 4 years, some even having track records of over 10 years.  Feel free to contact us to learn more about how we can offer you a properly balanced mix of CTA's and market diversification that can be custom tailored to fit your portfolio investment goals and individual risk tolerance.


Why use CTA Managed Futures Accounts?
Most people who attempt to trade futures on their own do poorly over the long run, just as you would expect any non-professional to perform in a specialized field that is challenging and complex.  Thus, choosing to invest a small portion of your funds with a professional Commodity Trading Advisor (CTA) may increase your probabilities for success.

CTA’s are National Futures Association (NFA) members who professionally manage investors’ funds in commodities markets, similar to a stock mutual fund manager investing his clients’ funds into different stocks.  A CTA "managed futures" account is one where you give a registered CTA the responsibility of making trading decisions and placing trades for your account.  After granting this authority to the CTA, you may withdraw it at any time. 

Professional investment managers have been using "managed futures" with Commodity Trading Advisors for over than 30 years.  Even institutional investors such as pension funds, endowments, trusts, and banks often include "managed futures" as a small portion of a well-diversified portfolio. 

Read about the many benefits of CTA Managed Futures as explained in this CBOT booklet by clicking HERE.  (Your computer should have the free Adobe Acrobat Reader software that reads .pdf files.)


Research Studies and Portfolio Theory concerning Managed Futures
PIMCO, one of the largest fixed income management firms in the world, commissioned a research study by Ibbotson Associates which reaffirmed the value of allocating a small portion of your total investment portfolio to commodities.  A brief summary of that study follows below, or you may read the entire 61-page study by clicking HERE.

The study found that diversification into commodities during that time period provided high returns, an inflation hedge, and an improved risk/return profile in strategic asset allocation.  During the 35-year period from 1970 to 2004, the study found that commodities provided the highest return of any asset class, including U.S. equities.  Commodities also had a slightly negative correlation to the other asset classes in the study, often producing returns when traditional assets performed poorly and thus when returns from commodities were needed the most.

For example, over a 35-year period covered in the Ibbotson study, there were eight years when U.S. equities produced negative total returns.  During those eight years, commodities provided the highest return of any other asset class in the study.  Commodities also had the highest return during the two years when U.S. bond returns were negative.  Because commodities produced returns with low correlations to other investment assets, the study found that including commodities as a small percentage of one's long term investment portfolio could help the overall portfolio growth rate to be higher in the long run.

Finally, the study found that commodities were positively correlated to the rate of inflation, providing evidence for the belief that commodities also provide a hedge against inflation.  In fact, during a period of high inflation from 1970 to 1981, commodities outperformed all other asset classes.


The Ideal Portfolio Allocation Percentage into Commodities:
The percentage of a total portfolio to allocate to commodities varied depending on the allocation method.  At the 10% standard deviation level (a moderate risk level similar to a standard portfolio of 60% stocks and 40% bonds) the optimal allocation to commodities ranged between 22% using the capital asset pricing model to 28.9% using the building-blocks method.  Even at a very conservative 5% risk level, the optimal allocations into commodities ranged from 9% - 14% of a total investment portfolio.


CTA Managed Futures Accounts: VERY IMPORTANT TIPS!
Equity permitting, investors should seriously consider the benefit of diversification gained by allocating funds across multiple CTA's, trading systems, and commodity markets.  This includes using different CTA's in several different non-correlated markets, as well as using two or more CTA's when trading within the same market.  Diversification, while not a guarantee of success, does spread the risk inherent in any one single CTA, trading system, or program.


Legal Disclaimer:
The past performance of any investment, including commodities, is not necessarily indicative of future results.  Futures and options trading may involve substantial risk of loss and is not suitable for all investors.