MANAGED ACCOUNTS

Unlike hedging or speculative futures trading, managed futures are a non-correlated futures investment managed by a professional CTA. Managed futures can play an important role in a fully-diversified investment portfolio that includes stocks, bonds, mutual funds, insurance and annuities, and real estate. Non-correlated means that managed futures do not require specific economic conditions to profit, as do stocks, bonds or other traditional investments.
There are two ways to participate in managed futures: either through a privately managed account or by investing in a pool, typically a limited partnership offered by private offering memorandum.

Individual Managed Accounts/CTA Fee-Based

This type of account is similar to a hedging or speculative account in that the client opens a regular futures account, receives trading day statements, and is responsible for any margin calls. What is different is that discretion is given to a professional CTA who, in turn, makes all trading decisions for the account. A broker may or may not be involved with an individually managed account. These accounts can usually be cleared through any Futures Commission Merchant the client chooses and acceptable to the CTA. Individual managed accounts are charged a monthly fee based on account equity.

Funds/Limited Partnerships

This type of account is similar to an equity mutual fund in that the investment can normally be made through a securities account, the client buys a certain number of units in a fund/pool, the client receives only a monthly statement showing the value of each unit, and is not at risk for any more than the initial investment amount.

How to select a CTA or Fund/Limited Partnership

DEC Capital, Inc. can assist investors with the selection of a CTA. There are hundreds of CTAs to choose from. Another option is investing in a commodity pool, such as a limited partnership. DEC Capital, Inc. acts as a Commodity Trading Advisor and Commodity Pool Operator. Registered CTAs might specialize in specific markets, such as US stock indices, interest rates, foreign currencies or agricultural markets, e.g. DEC Capital, Inc.
Another criterion might be the minimum investment required, typically higher for privately managed accounts than for funds/limited partnerships. In fact, many CTAs require a minimum investment of as much as $500,000-$1 million, and are therefore, not a viable alternative for many investors.