Managed futures funds
Managed futures funds are entities formed for the purpose of investing assets directly or indirectly in the investment vehicles and trading strategies operated by Commodity Trading Advisors (CTAs). The typical CTA will employ a systematic trend-following approach where trading is automated by optimized computer based models.
How can managed futures funds help you?
Managed futures funds allow investors to access these trading strategies without having to actively manage individual positions. Managed futures funds offer investors diversification benefits by providing exposure to asset classes that may be difficult to access directly, such as commodities and currencies. They also may reduce overall risk within the asset class by trading numerous types of contracts and potentially across various trading styles.
Managed futures investments have been used by high-net-worth individuals and institutional investors for more than twenty years. Acceptance of this asset class has grown as investors seek greater diversity in their portfolios by increasing portfolio exposure to international investments and non-financial sectors such as commodities. Managed futures are speculative, involve a high degree of risk, may possess higher than average fee structure and contain limited redemption features.
Before you purchase an investment, investors should review their financial situation, investment objectives, risk tolerance, time horizon, diversification needs and need for liquidity with their financial advisor.
The purchase of managed futures funds is limited to investors who meet the financial suitability standards as specified in the prospectus or offering memorandum. Please refer to the prospectus or offering memorandum for additional disclosure and information regarding the risks associated with the applicable managed futures fund.
Managed futures funds are illiquid investments, subject to restrictions on transferability and resale. No secondary market exists for managed futures funds. Investors must understand the liquidity requirements and redemption process for each fund they purchase.
Past performance does not guarantee future results.
Most managed futures funds are highly leveraged and depend on market trends in order to generate profits for investors. In the absence of trending markets, managed futures funds can suffer heavy losses, which can be magnified by the use of leverage.
Tax consequences resulting from investment in derivative contracts vary. It is imperative investors consult the applicable managed futures fund prospectus and a tax advisor to ascertain and understand the various tax consequences which may result from an investment in a managed futures fund.
Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
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