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New Managers March 2014

Guest Article: The Odds with managed futures

 

Diane Harrison

This article was authored by Diane Harrison. She principal and owner of Panegyric Marketing, a strategic marketing communications firm founded in 2002 and specializing in a wide range of writing services within the alternative assets sector. A published author and speaker, she has over 20 years' of expertise in hedge fund marketing, investor relations, sales collateral, and a variety of thought leadership deliverables

Improving the odds with managed futures

With uncertainty dominating world news and subsequent market reactions, investors crave any means available to help them mitigate portfolio investment risk. The use of alternatives has long been accepted by sophisticated investors as a proven way to help reduce overall portfolio risk over market cycles. Managed futures have always been central to this option, particularly when sharp volatility spikes drag traditional market classes down together.

Yet the asset class remains somewhat of a mystery to many investors. They question how managed futures can provide a port in the storm during choppy markets. They have been led to be skeptics based on a general tendency of the media to focus its coverage on trend follower's downside performance during the fiscal intervention years of recent past, and to exhibit a lack of emphasis on the benefits managed futures offer to investors through diversification and non correlation. To achieve the benefits of managed futures, investors need to minimize the risks and do everything they can to improve their chances for success during difficult market conditions. Let's take a look at some of the basic benefits that this strategy provides in dampening the pain investors are all too familiar with these days.

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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