What has been responsible for the growth in managed futures trading?
A variety of things. As traditional investment markets have become increasingly volatile – and vulnerable to often-unexpected events institutional money managers and other sophisticated investors have sought to more effectively manage overall portfolio risk through diversification. Indeed, risk and diversification are major concerns in today’s market environment — along with, of course, yield. A number of studies indicate that a portfolio that includes managed futures can yield an appreciably higher and more stable return over time than a portfolio that includes only stocks and bonds. The same evidence indicates this can be achieved without added risk. (See next question.
