Managed Futures: Portfolio Diversification (CME Group)

September 2012

KEYWORDS: managed futures, portfolio diversification, Institutional Investors, risk management, Volatility, central clearing, clearing, assets under management, AUM, hedge funds, CTA, commodity trading advisor, index, stock, investment risk, foreign exchange, commodity risk, Australia, European Union, EU, strategy, CFTC, Commodity Futures Trading Commission, SEC, Securities and Exchange Commission, FINRA, NFA, National Futures Association, Financial Industry Regulatory Authority, FCM, futures commission merchant, commodity pool operator, CPO, Consultants, fees


CME Group

  • CME Group


Managed futures have been used successfully by investment management professionals for more than 30 years. Institutional investors looking to maximize portfolio exposure continue to increase their use of managed futures as an integral component of a well diversified portfolio. With the ability to go both long and short, managed futures are highly flexible financial instruments with the potential to profit from rising and falling markets. Moreover, managed future funds have virtually no correlation to traditional asset classes, enabling them to enhance returns as well as lower overall volatility.

Recent growth in managed futures has been substantial. In 2002, it was estimated that more than $45 billion was under management by managed futures trading advisors. By the end of 2007, that number had grown to more than $200 billion. In this piece you will learn more about how managed futures create portfolio diversification opportunities and lower overall volatility, along with additional stats on why they have become so popular.

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