1. Diversify beyond the traditional asset classes.

Managed Futures are an alternative asset class that has achieved strong performance in both up and down markets, exhibiting low correlation to traditional asset classes, such as stocks, bonds, cash and real estate.

Managed Futures are an alternative asset class that has achieved strong performance in both up and down markets, exhibiting low correlation to traditional asset classes, such as stocks, bonds, cash and real estate.

2. Reduce overall portfolio volatility.

In general, as one asset class goes up, some other asset class goes down. Managed Futures invest across a broad spectrum of asset classes with the goal of achieving solid long-term returns.

3. Increase returns and reduce volatility.

Managed Futures, as well as commodities, when used in conjunction with traditional asset classes, may reduce risk, while at the same time potentially increasing returns.

4. Returns evident in any kind of economic environment.

Managed Futures may generate returns in bull and bear markets, boasting solid long-term track records despite economic downturns.

5. Strong performance during stock market declines.

Managed Futures may do well in down markets because they employ short-selling and options strategies that allow them to profit in such markets.

6. Successful pension plan sponsors use them.

Pension plans have long used Managed Futures to generate returns in excess of the S&P 500.

7. Commodity trade advisors (CTAs) and pool operators (CPOs) have access to a wide variety of global futures products that are liquid and transparent.

There are more than 150 liquid futures products across the globe, including stock indexes, fixed income, energies, metals, and agricultural products.

8. CTA/CPO community is regulated and trades on regulated futures exchanges.

Trading in a regulated marketplace builds the credibility and trustworthiness of the CTA/CPO community.

9. Risk management and clearing.

CME Clearing institutes some of the most sophisticated risk management practices in the financial world. As such, it has performed flawlessly during times of economic turbulence. In more than a century, CME Clearing has never experienced a default.

10. Overall industry growth has been exceptional.

In the last 30 years, assets under management for the Managed Futures industry have grown 800 fold (80,000 percent).

 

	Annualized Returns	Annualized Std Dev	Sharpe Ratio	Max Drawdown
50% S&P 500, 50% Lehman Gov/Corp	9.68%	7.77%	0.74	-16.07%
40% S&P 500, 40% Lehman Gov/Corp, 20% S&P/GSCi	10.26%	7.51%	0.85	-13.91%
40% S&P 500, 40% Lehman Gov/Corp, 20% dJ-AiG	9.78%	7.03%	0.84	-11.85%

Commodity Market indexes:
– S&P-GSCi (Total/excess/Spot) Return index is a trademark of Standard and Poor’s.
– Goldman Sachs Commodity index (GSCi)
– dow Jones-AiG Commodity index (dJ-AiGCi)

From CME Group Managed Futures Team

Mark Omens & David Lerman

Futures trading is not suitable for all investors, and involves the risk of loss. Futures are a leveraged investment, and because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles. And only a portion of those funds should be devoted to any one trade because they cannot expect to profit on every trade. All references to options refer to options on futures.

CMe Group is a trademark of CMe Group inc. The Globe logo, CMe and Chicago Mercantile exchange are trademarks of Chicago Mercantile exchange inc. Chicago Board of Trade and CBOT are trademarks of the Board of Trade of the City of Chicago, inc. new York Mercantile exchange and nYMex are trademarks of new York Mercantile exchange, inc. All other trademarks are the property of their respective owners.

S&P 500 is a trademark of The McGraw-Hill Companies, Inc., and have been licensed for use by Chicago Mercantile Exchange Inc.

“S&P GSCI,” “S&P GSCI Index,” “S&P GSCI” (Total/Excess/Spot) Return Index” and the “S&P GS Commodity Index” are trademarks of Standard & Poor’s.

“Dow Jones”, “AIG,” “dow Jones-AIG Commodity index” and “ “DJ-AIGCI” are registered trademarks or service marks of Dow Jones & Company, inc. and American International Group, Inc. (AIG).

The information within this brochure has been compiled by CME Group for general purposes only. CMe Group assumes no responsibility for any errors or omissions. Additionally, all examples in this brochure are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and are superseded by official CMe, CBOT and nYMex rules. Current rules should be consulted in all cases concerning contract specifications. Copyright © 2010 CMe Group. All rights reserved