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The
allure of an alternative investment such as Managed
Futures, lies in their ability to provide absolute
returns regardless of conditions such as a strong
economy, low inflation, or a bullish or bearish
share market.
All
of the alternative investment solutions we offer
revolve around the trading of futures markets, also
known as commodities or derivatives. Unlike most
other asset classes, where profits depend solely on
price appreciation, opportunities in futures exist in
both rising and falling, or even range bound markets.
Investment
management professionals have been using managed
futures for more than 30 years. Institutional
investors such as corporate and public pension funds,
endowments and trusts, and banks have made managed
futures part of well-diversified portfolio’s. The
Chicago Board of Trade, in 2002 estimated that over
$45 billion was under management by commodity trading
advisors. According to the Barclay Group, that has
risen to over $120 billion by 2005.
The
benefits of managed futures within a well-balanced
portfolio include an opportunity for reduced portfolio
volatility risk as well as the potential for enhanced
portfolio returns.
The
main benefits of a Managed Futures Account:
- Returns
independent of Share Market Performance
- Reduction
of risk via portfolio diversification
- Zero
entry and exit fees for managed futures accounts
- Liquidity
and transparency.
- Low
correlation to traditional investments such as
stocks, real-estate, and bonds
The alternative investment solutions we offer focus
on low correlated investments. According to Dr.
Harry M. Markowitz, the Nobel prize-winning economist
and father of modern portfolio theory, portfolios with
decreased volatility and increased performance can be
created by diversifying among asset categories with
low to negative correlation, such as stocks and
commodities.
Subscribers
to this theory believe an investment portfolio
utilizing the futures markets through trading systems
and managed futures stands to perform better, with
lower overall risk, with the addition of alternative
investments.
Safety:
Investor
funds are under the direct control of the individual
and held in a segregated account at Harris Trust and
Savings Bank or JP Morgan Chase under either Peregrine
Financial Group LLC, or Man Futures customer funds
account.
Liquidity:
The
natural liquidity of futures markets allows investors
the ability to liquidate their investment on very
short notice in most cases. This means your investment
has no lock out period and no minimum term for
investing. While those investors who take a long term
horizon often see better performance results, it is
nice to know your investment can be liquid within a
single day. Liquidity in the U.S. treasury futures for
example, is one of the largest in the world. Chicago
Board Of Trade financial futures trading volumes
average in excess of one million contracts per day.
Transparency:
The
question of “How is my investment doing?” is often
very difficult to answer when investing in some
investments due to a lack of transparency.
Unlike other alternative investments in instruments
like hedge funds or private equity deals where
performance is reported monthly or quarterly; your
managed futures investment is completely transparent,
with the ability to view account statements and real
time market valuations of your account 24 hours a day
through an online system.
Risk
vs Reward:
A
study published by the Chicago Mercantile Exchange
concluded that portfolios with as much as 20% of
assets in managed futures yielded up to 50% more with
comparable risk than portfolios of stocks and bonds
alone. The enclosed graph, "Impact of Incremental
Additions of Managed Futures to the Traditional
Portfolio," provided by the Chicago Board of
Trade, shows that a traditional portfolio (55% stocks,
45% bonds, and 0% managed futures) presents an
investor with the greatest risk and lowest returns.
However, a portfolio comprising 45% stocks, 35% bonds,
and 20% managed futures offers an investor the
greatest returns and least amount of risk.
**
Past performance is not necessarily indicative of
future results
Image provided by the Chicago Board of Trade
Download Peregrine
Financial Group, Inc. Customer Account Agreement (Necessary for all
account types).
• Customer
Account Agreement
• ACM
System Acknowledgement
• U.S
4.7 Disclosure
• Non
4.7 U.S. Disclosure
• System
Trading Letter of Direction
• W-8BEN
• W-9
• Midshipman
Services PL - Financial Services Guide
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