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The Potential Benefits of Managed Futures

July 2022

Used by investment professionals for more than 30 years, managed futures are an asset class with over $360 billion in assets under management. Managed futures can play an important role by:

  • Providing the potential for positive returns in a variety of economic environments
  • Possibly increasing diversification in a portfolio by investing in commodities and financial futures
  • Helping to potentially reduce risk

Potential for Enhanced Returns

Managed futures have the potential to produce positive returns in both equity bull and bear markets, striving to enhancing a portfolio’s overall performance.

Performance of Managed Futures and U.S. Stock

Growth of a Hypothetical $1,000 investment – September 1, 2000, through June 30, 2022

Chart showing the Performance of Managed Futures and U.S. Stock

Potential for Increased Diversification

Managed futures provide exposure to a broad variety of global investments in commodities and financial futures. The below hypothetical charts illustrate how adding managed futures to a portfolio of stocks and bonds has the potential to enhance returns and reduce volatility.

Hypothetical chart illustrating adding managed futures to a portfolio

Potential for Mitigated Risk

Managed futures have shown strong historical performance when stocks have suffered. The graph below illustrates the performance of managed futures during the 5 worst drawdowns of the S&P 500 Index.

Chart showing managed futures during 5 worst drawdowns for the S&P 500 Index

 

Learn more about Long/Short Commodities >