A Rationale For Managed Futures
by Charles R. Lightner
Although the futures markets are widely misunderstood even
among knowledgeable investors, they serve a critical purpose
in our economy; through the managed futures industry,
they provide an important investment opportunity for both
institutions and individuals, and they need not expose the
investor to unreasonable levels of risk.
Stocks, bonds, and real estate are
the largest and best-known types
of investments in our economy.
They have distinctly different
investment characteristics, and
each has a specific effect on an
investment portfolio. Over the
past 20 years, the products of
the managed futures industry,
which invests in the global futures
markets, have also been
shown to have unique, important,
and beneficial effects when added to investment portfolios.
Managed futures may represent the smallest of the
alternative asset classes, but its characteristics are becoming
better and better known and its value in an investment
portfolio is becoming increasingly clear. Here’s a brief look
at why managed futures perform as they do and how they can be understood in the context of the economic purpose served
by the futures markets.