Managed Futures


DEFINITION of 'Managed Futures'

An alternative investment strategy in which professional portfolio managers use futures contracts as part of their overall investment strategy. Managed futures provide portfolio diversification among various types of investment styles and asset classes to help mitigate portfolio risk in a way that is not possible in direct equity investments.

BREAKING DOWN 'Managed Futures'

Professional money managers, known as commodity trading advisors, typically monitor managed futures accounts. These accounts can have various weights in stocks and derivative investments. A diversified managed futures account will generally have exposure to a number of markets such as commodities, energy, agriculture and currency. Introducing futures into a portfolio reduces risk because of the negative correlation between asset groups.

  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Forward Contract

    A customized contract between two parties to buy or sell an asset ...
  3. Options On Futures

    An option on a futures contract gives the holder the right to ...
  4. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  5. Portfolio Management

    Portfolio Management is the art and science of making decisions ...
  6. Money Manager

    A business or bank responsible for managing the securities portfolio ...
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