Markets Home

Active trader

Hear from active traders about their experience adding CME Group futures and options on futures to their portfolio.

Find a broker

Search our directory for a broker that fits your needs.

CREATE A CMEGROUP.COM ACCOUNT:

MORE FEATURES, MORE INSIGHTS

Get quick access to tools and premium content, or customize a portfolio and set alerts to follow the market.
Market Data Home

Real-time market data

Stream live futures and options market data directly from CME Group.

E-quotes application

Access real-time data, charts, analytics and news from anywhere at anytime.

CME DATAMINE:

THE SOURCE FOR HISTORICAL DATA

Explore historical market data straight from the source to help refine your trading strategies.
Services Home

Uncleared margin rules

Understand how CME Group can help you navigate new initial margin regulatory and reporting requirements.

Calculate margin 

Evaluate your cleared margin requirements using our interactive margin calculator.
Education Home

FX Insights from Macro Hive

Receive exclusive insights on key FX macro themes, volatility trends, and market events through our bi-weekly report.

Create a CMEGroup.com Account: More features, more insights

Get quick access to premium educational content, including expert-led webinars, a real-time trading simulator, and more.
      Course Overview
      • What are Managed Futures?
      • Compelling Reasons to Allocate to Managed Futures
      • Evaluating CTAs Quantitative and Qualitative Factors
      • Comparing CTA Strategies
      Managed Futures
      You completed this course.Get Completion Certificate

      Managed Futures

      Video not supported!

      Most individual and institutional investors understand the traditional asset classes. Stocks, bonds, real estate and cash are home to substantial sums of wealth around the globe and have been the backbone of portfolios for generations of investors. But, beyond these asset classes lie several alternative asset classes and strategies. The bulk of these alternative strategies are made up of private equity, infrastructure, and Hedge Funds. Managed Futures are a type of Hedge fund strategy. For investors seeking returns beyond traditional assets and strategies, they often look to alternative investments like Managed futures.

      Commodity Trading Advisor (CTA)

      Simply put the term Managed futures describes a strategy whereby a professional manager assembles a diversified portfolio of futures contracts. These professional managers are also known as Commodity Trading Advisors (CTAs). While a typical money manager or portfolio manager trades in a diversified portfolio of stocks or bonds or a combination of both, CTAs trade primarily futures contracts.

      Some CTAs manage their clients' assets by employing proprietary trading systems. Some utilize systematic, computer-driven mechanical strategies and others employ discretionary methods. Managed futures programs generally take long or short positions in futures contracts, offered on exchanges worldwide. The strategies and approaches within managed futures are extremely varied but the one common, unifying characteristic is that these managers trade highly liquid, regulated, exchange-traded instruments and foreign exchange markets.

      CTAs will often invest in a portfolio of futures contracts consisting of:

      • Fixed income futures, such as U.S. treasury notes or treasury bonds.
      • Stock index futures, such as S&P 500 futures or Russell 2000 futures
      • Commodity futures, such as soybean, crude oil, coffee, sugar and gold futures
      • Foreign currency futures, such as Euro FX, British pounds and yen

      Ironically, the title Commodity Trading Advisor might lead you to think that CTAs trade solely commodity products like grains, metals or livestock. But nothing could be further from the truth as CTAs by and large trade financial futures. True, while there are some CTAs that might focus a managed futures portfolio on commodities, many CTAs usually emphasize financial futures, such as stock index futures and interest rate futures, because those markets are exceptionally liquid and transaction costs are minimal.

      Regulated Exchanges

      CTAs trade on many exchanges globally, including CME Group (the largest derivatives marketplace in the world), Eurex (located in Germany) and Atlanta-based Intercontinental Exchange (ICE).

      CTAs are regulated by the Commodity Futures Trading Commission, must register with the CFTC and are subjected to filing rigorous disclosure documents with the National Futures Association (NFA).

      FACTOID: The first publicly managed futures fund, Futures, Inc., was started in 1949 by Richard Donchian. He also developed the trend timing method of futures investing. Richard Donchian is considered to be the creator of the managed futures industry and is credited with developing a systematic approach to futures money management. His professional trading career was dedicated to advancing a more conservative approach to futures trading.

      Managed Futures Growth

      Over the past several decades, investors large and small have embraced managed futures. The growth in assets under management (AUM) has been impressive and AUM has recently topped $348 billion; up from virtually nothing 36 years ago.


      Test your knowledge

      Related Courses
      /content/cmegroup/en/education/courses/managed-futures/what-are-managed-futures
      • {{ course.name }}
      Previous Lesson
      Next Lesson
      Course Overview
      Get Completion Certificate
      Previous Lesson Next Lesson
      • YouTube
      • Twitter
      • Facebook
      • LinkedIn
      • Instagram
      • Rss

      CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). 
      Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

      © 2021 CME Group Inc. All rights reserved.

      Disclaimer  |  Privacy Policy  |  Cookie Policy  |  Terms of Use  |  Data Terms of Use  |  Modern Slavery Act Transparency Statement  |  Report a Security Concern