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Managed Futures - An Alternative Investment For Mutual Fund Investors
Many investors are not familiar with the various ways to go about participating in futures. Among the wealthy, along with investors in the know, there is a simple but slightly expensive way to invest in futures, managed accounts. These managed accounts are known as Managed Futures. A CTA (Commodity Trading Advisor) will typically devise a strategy to trade the futures markets. In this way he is similar to a fund manager. A CTA will then raise capital from various institutions and private investors. The minimum investment can range from $50,000 to $250,000. Once that is accomplished they will then use their strategy to increase the money under management. In return they will charge a management fee of 1-2% and a 20% profit sharing incentive fee. At the close of last year the top five CTA's with more than $10 million under management were up 13.29%, 61.37%, 36.56%, 56.80%, 69.21%. The stock market doesn't compare. Over the last three years the Nasdaq had a 74 percent drop, which cost shareholders $4.8 trillion in paper wealth through last Friday. U.S. stocks have fallen 40-plus-percent as a whole, which Wilshire Associates calculates has cost $7 trillion. Sources of CTA performance information • Barclay Trading Group 515.472.3456 • Managed Account Reports 212.213.6202 • Stark Research Inc. 619.459.0818 Noble DraKoln is the author of the best-selling books Futures For Small Speculators and Single Stock Futures For Small Speculators, available on http://www.amazon.com. He has been a futures investor, broker, and analyst for almost 11 years. You can subscribe to his free monthly newsletter at http://www.liverpoolgroup.com.
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