| Symbol | Last | Chg |
| DOW JONES INDUS.(DAY)-$10 | 11351 | -262 |
| S&P 500 | 125380 | 0 |
| NASDAQ 100 | 182200 | 250 |
| US TREASURY BOND | 115060 | 60 |
| US DOLLAR INDEX FUTURES,SEP-20 | 73070 | -55 |
| CANADIAN DOLLAR | 9846 | -18 |
| EURO | 156330 | 170 |
| GOLD | ||
| SILVER | ||
| CORN (DAY) | 5730 | 14 |
| WHEAT (DAY) | 7876 | 44 |
| SOYBEANS (DAY) | 13850 | -92 |
| HEATING OIL | ||
| LIGHT CRUDE OIL | 12554 | 5 |
| COFFEE 'C' FUTURES,SEP-2008,ET | 13520 | -75 |
| Data is delayed 10 minutes or more. | ||
Managed Futures
1. What are Managed Futures?
Managed futures is the term used to describe investing
in the futures markets with the benefit of a professional
money manager, called a “Commodity Trading Advisor” (CTA).
2. What is a CTA?
CTAs are typically registered with a national regulatory
body, subject to oversight and monitoring by these authorities,
and required to provide adequate disclosure to the investor.
There are approximately 3,000 CTAs registered in the
United States as well as others operating under the
regulations of many other countries, including the UK.
3. How do CTAs make profits?
CTAs employ a variety of techniques that have been developed
and tested in the marketplace to attempt to achieve
profits and minimize risks. CTAs can typically trade
on technical indicators (price movement, trading volume,
chart patterns, and time series) or on fundamental information
(supply and demand data). The quality and results of
the many CTAs available in the marketplace vary in a
range as great as the number of CTAs themselves.
4. What are typical CTA fees?
The typical CTA fees are expected to
be a management fee ranging between 1.5% and 2% per
annum and a performance fee ranging between 20% and
25% of any net new profits. The costs are accrued daily,
and all CTA results are net of these operating costs.
5. Why invest in Managed Futures?
Over the long term managed futures represents a class
of “alternative investments” providing valuable
diversification to a traditional portfolio of equities
and bonds. Managed futures have been shown to provide
returns with little or no relation to the timing and
magnitude of the returns associated with traditional
securities.
6. How do I participate in
Managed Futures?
Most investors have neither the time nor the resources
to select a CTA. That is why most investing today in
managed futures is done through products and vehicles
that are structured to aggregate investor money and
delegate advisor selection and monitoring to an experienced
managed futures intermediary. This is where PFG’s
Managed Futures Division adds value to the managed futures
investment process.
7. What is a Managed Futures
Account?
A Professionally managed futures account is a discretionary
account you give permission to a Commodity Trading Advisor
(CTA) to make all trading decisions on your behalf through
a revocable power of attorney.
8. Is a managed Futures Account
appropriate as a short-term investment?
Quite simply, no. Futures investing is a speculative
type of investing, and like most markets tend to be
cyclical. Additionally, even the most successful professional
traders experience periods of flat returns or even drawdowns.
Consequently, losses will be incurred for those trading
periods. The wise investor will remain steadfast to
his/her investment plan and not close the account prematurely
in order to allow the account to recover from those
temporary losses in equity. It would not be a wise investment
strategy to open an account that you do not intend to
maintain for at least 3 years, ideally 5, to benefit
from compounded returns for the longer term.
9. Are professionally managed
futures for everyone?
No, they are not. We would first provide you with all the necessary
information to make sure you understand both the risks
and rewards of this type of investing. Generally, in
addition to having the required risk capital, an investor
needs to have realistic expectations about returns on
investment, tolerance to temporary drawdowns that inevitably
will occur, and acceptance of the reality that the risk
of loss always exists.
10. How can I open an account
and how much money should I invest in a Managed Futures
Account?
Only risk capital should be used in managed futues or
any speculative investment. Risk capital is defined
as capital that you do not want to lose, but if you
did, your lifestyle would not be affected. We recommend
that the amount of money you invest depends on your
own temperament, financial goals and risk tolerance
and should usually be approximately 5% to 25% of your
overall portfolio. Each CTA trading program has different
account minimums as detailed in their disclosure documents.
11. What does PFG add to the
investment process?
PFG has experienced professionals managing every aspect
of the managed futures business. With more than 2,700
futures money manager to choose from in the investment
world, it is important that investors place their money
with a knowledgeable and experienced organization. It
is equally important for investors to have confidence
and trust in the track record established by an investment
firm as well as in the individual managing their accounts.
PFG maintains records on more than 225 futures money
managers and 390 programs. We work with only those managers
who meet our investment criteria and who have proven
themselves capable of managing client assets.
12. How do I find out more?
To request additional information, or to discuss managed
futures as an investment alternative, please fill out
the Contact Form or call our
toll-free number: 1 (800) 453-3290