Managed futures

Discussion in 'Professional Trading' started by alex104, Jul 9, 2007.

  1. alex104


    Can someone please explain me the difference between running a hedge fund and managed futures from legal standpoint as well as startup costs ?
  2. Managed futures are separately managed accounts that are in the name of the investor but traded by you (typically as a CTA). The investor likely has liability of losses greater than the account equity, but has a lot less fraud risk.

    A hedge fund is pooled capital and losses are limited to the amount of the investment (for the investor). There is a lot more operational risks, as well as administrative burden on the manager.

    A CTA can be set-up relatively cheap and easy (do a search, there are many threads on this). A hedge fund tends to cost more...
  3. zyadam84


    Not an expert in managed futures, but this is what I have found on Google. It has got the answer for the question you asked and all the basics about managed futures.
  4. alex104


    Thanks for valuable information. What are typical management fees charged by CTAs who run managed futures ?
  5. 6% Management
    44% Incentive...

    Sorry Channeling Simmonds here..

    Typical is 2% and 20%...
    But kiss that goodbye..

    Hello 1 and 10...
  6. Are you saying 1 and 10 is becoming the new norm? Still seems predominantly 2 and 20 if not higher in some cases.
  7. Medallion is 5/44. What is your argument for 1/10?
  8. I don't want to see it..but it's inevitable..
    stock commissions DOWN
    futures commissions DOWN
    managed equity funds fees DOWN

    Next will be the futures guys...

    Have you seen the results of some of these CTA's?

    Imagine managing 4 billion and you're annual return is -3% over 5 years...
  9. It's not the norm at all...
    But in 5 years it will be...
  10. The norm is still 2/20, but often times those are negotiable on managed accounts.

    If you are Jim Simmons, and have his track record, you can pretty much charge anything you want.

    There seems to be a considerable number of clueless people that look at CTA returns and call them crap because they are low. You really need to look at some other metrics to compare apples to apples. You need to look at margin/equity levels, drawdowns and vol to get a more accurate view. Most managed futures accounts are notionally funded....

    Atticus, how's the heat treating you over the hill?
    #10     Jul 10, 2007