CAIA Level II: Advanced Core Topics in Alternative Investments, 2nd Edition

CHAPTER 29

Structure of the Managed Futures Industry

The term managed futures denotes the sector of the investment industry in which professional money managers actively manage client assets using global futures and other derivatives as investment instruments.1 In the United States, managed futures managers are also known as commodity trading advisers (CTAs) or commodity pool operators (CPOs). The first managed futures fund started in 1948; significant growth in managed futures began in earnest in the 1980s.

Managed futures, through their ability to take both long and short investment positions in commodity, equity, fixed-income, and currency futures and forward contracts, offer risk and return patterns not easily accessible through traditional asset classes (such as long-only stock and bond portfolios) or other alternative investments (such as hedge funds, real estate, private equity, or long-only commodities).