Four Reasons for Alternative Investments

Managed futures, by their very nature, are a diversified investment opportunity. Trading advisors have the ability to trade in over 50 different markets worldwide. Many funds further diversify by using several trading advisors with different trading approaches.

The benefits of futures within a well balanced alternative portfolio include:

1. Opportunity to balance portfolio volatility risk.
   This balancing of the portfolio is possible because of the low to slightly negative correlation of managed futures with equities and bonds. (One of the key tenets of Modern Portfolio Theory, as developed by the Nobel Prize economist Dr. Harry M. Markowitz, is that more efficient investment portfolios can be created by diversifying among asset categories with low to negative correlations)
   
   
2. Potential to enhance portfolio.
   Adding managed futures to a traditional portfolio improves overall diversification of investments. This is substantiated by an extensive bank of academic research, beginning with the landmark study of the late Dr. John Lintner of Harvard University, in which he wrote that "the combined portfolios of stocks (or stocks and bonds) after including judicious investments in leveraged managed futures accounts show substantially less risk at every possible level of expected return than portfolios of stocks (or stocks and bonds) alone." Lintner's research was substantiated by a 12 year study by Managed Accounts Reports.
   
   
3. Ability to profit in any economic environment.
   Managed futures trading advisors can take advantage of price trends. They can buy futures positions in anticipation of a rising market or sell futures positions if they anticipate a falling market. For example, during periods of hyperinflation, hard commodities such as gold, silver, oil, grains, and livestock investments tend to do well, as do the major world currencies. During deflationary times, futures provide an opportunity to profit by selling into a declining market with the expectation of buying, or closing out the position, at a lower price. Trading advisors can even use strategies employing options on futures contracts that allow for profit potential in flat or neutral markets.
   
   
4. Opportunity to easily participate in global market investments.
   Managed futures accounts can participate in at least 50 different markets worldwide, including stock indexes, financial instruments, agricultural and tropical products, precious and nonferrous metals, currencies, and energy products. Trading advisors thus have ample opportunity for profit potential and risk reduction among a broad array of non- correlated markets.