Managed Futures

Discussion in 'Financial Futures' started by george_s, Jan 2, 2006.

  1. I plan to start active investing/trading in stocks/mutual funds/options. As a hedge to my own efforts and for diversification purposes, I want to invest some money in managed futures (e.g. with CTA's).

    The managed futures brokerage firms I have looked at so far, are similar to "full service" brokers. They screen the CTA's for you, recommend which CTA's to invest with, how much to invest in each one etc.

    I do not want or need this hand holding and I'd like to select my own CTA's and to make the asset allocation myself in order to save expenses/fees and to give me more tranparency, control over leverage, money management etc.

    But I thought it might be useful for a firm to provide a framework for accounting, consolidation etc. In other words, I am looking for a "discount broker" for CTA's where I do not need advice, similar to how some discount brokers let you select from a list of mutual funds.

    Perhaps I should just contact individual CTA's myself and I do not need a broker at all.

    Does anyone out there know of any discount brokers for self-directed investors in managed futures or have experience with managing the process of interacting with the CTA's themselves?

    Any feedback would be greatly appreciated.
  2. hans37


    That sounds pretty dumb if you ask me.

    If you want a hedge against your own trading I suggest indexing through low cost etf's.
  3. I'm really looking more for diversification, not just a straight hedge. The idea is to try to get positive alpha on all of the investment capital. In general, selling short equities is a loser's game with negative alpha.

    Also I want to move beyond just equities. Futures can provide diversification across other areas, but I won't have the time to actively manage them myself. That's why I'd like to use the CTA's to manage some of the money.
  4. hans37


    I bought a quarterly report several years ago that supplies performance and risk data on cta's.

    They listed phone numbers and min investment sums too.
  5. Thanks, Hans!

    A single edition of the Managed Futures report for $325 should give me enough CTA contact info to get started.

    My major concern is that the overall expense overhead may be too high to make this approach worthwhile. But I'll have a better idea after talking to some CTA's. I have a lot of my capital tied up in 401K's and IRA's and would need to know whether they can accept those.
  6. hans37


    you are welcome.

    Yes , expenses are KEY that's why I recommend diversifying with index tracking etf's.

    you might also want to investigate Dimensional fund advisors(mutual funds), usually they only accept institutional investors.
    however i do own an ira with their funds through
    it's an interesting site for learning about dimensional funds
  7. I just discovered a (free) web site with info on CTA's and managed futures- I'll probably start with their info, but I would imagine the marhedge data is more comprehensive. Most likely I'll buy their report later.
  8. Thanks, Hans. Actually I'm quite experienced in mutual fund investing and know about the Dimension funds. In fact, I currently own some DFIVX in my 401K plan.

    But I've been looking beyond mutual fund investing because of all of the trading restrictions and exit redemption fees.
  9. Also look at which is free, and need to register but free as well. If you are an experienced investor finding a decent CTA with this info shouldn't be very hard. Almost all (with the exception of Quadriga whos fees are enormous and return stream is very volatile) require you to be a qualified investor (2 million in assets) and have a minium investment of at least 250k.

    Good Luck

  10. Ebo


    #10     Jan 2, 2006