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Benefits of Managed Futures

Profit Potential in Bull & Bear Markets

Unlike most traditional buy-and-hold strategies, managed futures is an absolute return strategy that can take a long or short position in any market in the portfolio. This flexibility offers profit potential in both bull and bear markets, and in periods of crisis as well as calm. The ability to go short when markets are weak is a hallmark of any managed futures strategy, and is valuable in helping it generate returns that can provide investors with value-added diversification across many different market environments. In fact, going short provides built-in risk management that allows a trend-following strategy to flip its position as trends change. As seen in the chart below, this flexibility has generated drawdowns (peak-to-trough declines in equity) that are significantly smaller and more consistent than most other investment strategies.

Global, Multi-Strategy Exposure

When it comes to offering broad-based diversification, few strategies can compete with managed futures. And fortunately for investors, that diversification comes in two varieties.

First, most managed futures strategies offer exposure to four major asset classes - global equity indices, global fixed income instruments, currencies, and commodities. This diversification ensures that if trends are present within an asset class, either up or down, that investors will have exposure to those trends. Since these four asset classes don’t tend to be highly correlated to one another over long periods of time, the resulting portfolio diversification serves as a powerful tool for achieving attractive risk-adjusted returns that would be difficult to replicate by trading a single market or asset class. For example, our flagship Program, the Global Monetary Program trades in the following markets:

Value Added Non-Correlation

Managed futures has historically exhibited a low or near-zero correlation to a broad range of different markets, asset classes, and investment styles. This benefit makes it one of a small handful of “true” diversifiers available to investors. It’s important to note that this isn’t a fleeting benefit, but rather one that has stood the test of time. While many other perceived diversifiers have been exposed during periods of crisis as being anything but non-correlated, managed futures has consistently delivered on its promise to deliver returns that are truly unique from almost any other approach. After the Great Recession of 2008-2009 the volume of academic literature related to the non-correlation benefit of managed futures has grown dramatically and is helping to educate a new audience of investors about the diversifying potential of managed futures.

Enhanced Portfolio Diversification

As global stock and bond markets have become more interdependent recently it has become increasingly difficult for investors to find investments that do not move in parallel with one another, particularly in times of market stress. Managed futures has traditionally served this role well and continues to build on its long and distinguished history of being both a return enhancer and a diversifier when compared to most traditional or alternative strategies. These tandem benefits have made managed futures a valued and time-tested strategy for enhancing risk-adjusted returns in a variety of market conditions.

DISCLAIMER - THE INFORMATION CONTAINED HEREIN IS INTENDED FOR USE BY QUALIFIED ELIGIBLE CLIENT. FUTURES, FORWARD AND OPTIONS TRADING IS SPECULATIVE, INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS. THIS INFORMATION IS NOT A SOLICITATION FOR INVESTMENT. SUCH INVESTMENT IS OFFERED ON THE BASIS OF INFORMATION AND REPRESENTATIONS MADE IN THE APPROPRIATE OFFERING DOCUMENTATION.

PURSUANT TO AN EXEMPTION FROM THE FINANCIAL MARKET SUPERVISORY AUTHORITY IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE CLIENTS, THE INFORMATION PRESENTED ON THIS WEB SITE IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE SUPERVISORY AUTHORITY. THE FINANCIAL MARKET SUPERVISORY AUTHORITY DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE FINANCIAL MARKET SUPERVISORY AUTHORITY HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR OF ANY OF THE INFORMATION PRESENTED ON THIS WEB SITE.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. FUTURES, FORWARD AND OPTION TRADING IS SPECULATIVE, INVOLVES SUBSTANTIAL RISK, AND IS NOT SUITABLE FOR ALL INVESTORS.