Managed futures represent an asset class managed by Commodity Trading Advisors (CTAs). These managers use their own computer-based trading systems to identify and react to price movements to invest in futures and options contracts. The majority of managed futures managers employ quantitative trend-following strategies, which alert managers when to take long or short positions once trends develop. This gives them an opportunity to potentially profit from both positive and negative developments across multiple markets and asset classes simultaneously.
Managed futures managers trade in generally transparent markets that typically provide daily liquidity. They have two key potential advantages as they seek to generate absolute returns. Of course, there is no guarantee that any investment will achieve its objectives, generate profits or avoid losses.