CHAPTER 11 Managed Futures

Managed futures are a type of alternative investment that incorporates a number of hedge fund trading strategies using futures as investment vehicles. Managed futures are considered an alternative investment relative to mainstream investments such as stocks and bonds, and help round out a portfolio as they generate investment returns that are generally uncorrelated to mainstream investments. Futures contracts provide tremendous flexibility for investment managers, allowing both long and short positions that open up a broad range of strategies to enhance returns, since performance can be strong during both increasing and decreasing market conditions.

The managed-futures business has increased substantially throughout ...

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