Why Managed Futures?
There are several reasons investors may want to consider managed futures accounts as an alternative to other traditional asset classes:
- Diversification: historically, managed futures have exhibited a negative correlation with traditional assets like stocks and bonds;
- Transparency: unlike hedge funds and other alternative investments, managed futures accounts are held in the investor’s name, and can be accessed or inspected by the investor at any time; similarly, managed accounts do not feature the “lockup” periods typical of most hedge funds;
- Tax treatment: futures are eligible for 60/40 tax treatment, are exempt from wash sale rules, and losses can be carried back three years against prior gains, making them attractive from a tax standpoint when compared to many other products like ETFs.
- Margin: the SPAN (standardized portfolio analysis of risk) margin available on most futures and options exchanges tends to be more favorable than the Reg-T margin requirements familiar to most equity option investors.
For more information about the benefits of managed futures accounts, please contact us.
Futures- and options-based investments are often complex and can carry the risk of substantial losses. They are intended for sophisticated investors and are not suitable for everyone. The ability to withstand losses and to adhere to a particular trading program in spite of trading losses are material points which can adversely affect investor returns.