KEY TAKEAWAYS
- Managed futures products usually implement trading
methods that involve going long or short in futures and
commodities diversified across global futures markets
based on market trends. - The 50/30/20 allocation model (50% U.S. Equities, 30%
Bonds and 20% Managed Futures) offers a simple
approach to integrating managed futures exposure into
a portfolio: take 10% from both equities and bonds to
allocate to managed futures. - Financial Advisors and investors should consider the
use of Managed Futures products, to strive to provide
an uncorrelated return stream and reduce the impact of
drawdowns. - Rational/NuWave Enhanced Market Opportunity Fund
(NUXIX) seeks long-term capital appreciation and
superior risk-adjusted returns by combining an actively
managed U.S. equities component and a broadly
diversified managed futures component, providing both
long and short exposures across a wide variety of
financial and commodity markets.
Adding Alternatives:
Enhanced Portfolio Positioning for Risks and Opportunities via Integration of Managed Futures into Equity Portfolios
Enhanced Portfolio Positioning for Risks and Opportunities via Integration of Managed Futures into Equity Portfolios
With the bull market in its ninth year, many investors are faced with the challenge of continuing to improve their investment portfolio returns, while at the same time lowering risk and reducing the impact of potential drawdowns. In today’s global markets, the traditional asset allocation mix of long-only stocks and bonds may not adequately position investors’ portfolios for risks and growth opportunities.
While no one can predict when the next market drawdown will occur, Financial Advisors and investors should consider the use of Managed Futures products, to strive to provide an uncorrelated return stream and reduce the impact of drawdowns. Historically, implementing managed futures exposure into a portfolio may have resulted in higher returns with reduced drawdowns and lower volatility. Even a 10% allocation to managed futures exposure would have significantly improved portfolio performance.
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8161-NLD-9/28/2018
