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How to Invest in Managed Futures

Investing in Managed Futures Can Offer a Safer Way to Trade the Futures Markets


Managed futures are accounts that are professionally managed by commodity trading advisors (CTAs). They are very similar to mutual funds, but they only trade futures and futures option contracts. This may be a much more attractive and safer way to invest in the futures markets than trading your own account.

Disclosure Document

The disclosure document is required to be provided to you if you are considering investing with the CTA. There is a wealth of information in the document that covers:
  • Background information on the CTA.
  • Trading plan and strategies that will be used to manage your funds.
  • Rate of return the CTA has experienced in previous months and years.
  • Fees that the CTA charges to manage the account.

This information will give you a good idea if this is the right investment for you. Most CTAs require a minimum investment of $25,000 and manage accounts into the millions. They typically charge a 2% yearly fee to manage the account and share in 20% of the profits they make on your account.

Comparing CTAs

Past performance will be a key factor you use in choosing a CTA. You will want to see the returns that have been made in previous years and look for consistency. Some CTA’s will have high returns for a couple years in a row and then have a devastating loss the following year. It’s a safer bet to pick a CTA who has steady profits every year.

There are some good sources you can use to research CTAs and compare their performance.

Autumn Gold – they have a free service that shows the 2-month returns of top 100 CTAs and includes their profiles.

CTA-Index - free subscription to their service of more than 400 pages of profiles and top 20 CTA rankings.

The Barclay Group – excellent source of information on CTAs. Requires a free sign-up.

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