The major part of Henrik Hallenborg management consists of professional trading with futures on behalf of clients, i.e. Managed Futures, on the exchanges CME, CBOT, NYMEX and COMEX, owned by CME Group, the world’s leading and most diverse derivatives marketplace.
Below we present a transcript of CME Groups promotion material 10 COMPELLING REASONS TO CONSIDER ADDING MANAGED FUTURES TO YOUR PORTFOLIO
Convincing as their argumentation may seem, please keep in mind that the addition of Managed Futures to an investor’s portfolio does not necessarily mean that the portfolio will be profitable or that it will not experience substantial losses.
Henrik Hallenborgs Fund Management activity also does not necessarily fit CME Groups general observations about Managed Futures Investment.
THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.
1. Diversify beyond the traditional asset classes.
Managed Futures are an alternative asset class that has achieved strong performance in both up and down markets, exhibiting low correlation to traditional asset classes, such as stocks, bonds, cash and real estate.
2. Reduce overall portfolio volatility.
In general, as one asset class goes up, some other asset class goes down. Managed Futures invest across a broad spectrum of asset classes with the goal of achieving solid long-term returns.
3. Increase returns and reduce volatility.
Managed Futures, as well as commodities, when used in conjunction with traditional asset classes, may reduce risk, while at the same time potentially increasing returns.
4. Returns evident in any kind of economic environment.
Managed Futures may generate returns in bull and bear markets, boasting solid long-term track records despite economic downturns. Moreover, they often do so with less volatility and smaller drawdowns than other asset classes (see chart above).
5. Strong performance during stock market declines.
Managed Futures may do well in down markets because they employ short-selling and options strategies that allow them to profi t in such markets.
6. Successful institutions use them.
Pension Plan Sponsors, Endowments and Foundations have long used Managed Futures to generate returns in excess of the S&P 500.
7. Commodity Trading Advisors (CTAs), Pool Operators (CPOs), and Managed Futures Mutual Funds have access to a wide variety of global futures products that are liquid and transparent.
There are more than 150 liquid futures products across the globe, including stock indexes, fixed income, energies, metals, and agricultural products.
8. The CTA/CPO/Managed Futures Mutual Fund community is regulated.
Trading in a regulated marketplace builds the credibility and trustworthiness of the CTA/CPO/Managed Futures Mutual Fund community.
9. Risk Management and Clearing
CME Clearing institutes some of the most sophisticated risk management practices in the financial world. For more than 100 years, CME Clearing has provided services that substantially mitigate the risk of clearing member failure. CME Clearing has provided the resources to ensure the performance of every contract on our exchanges for more than a century.
10. Overall industry growth has been exceptional.
In the last 35 years, assets under management for the Managed Futures industry have grown 1000 fold. Current assets under management stand at over $310 billion.
(Source: CME Group)
SPX/SPTR Standard & Poor’s 500 Index (SPX). An index of 505 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.
TR – a total return index is an index that measures the performance of a group of components by assuming that all cash distributions are reinvested, in addition to tracking the components’ price movements.
The Barclay CTA Index is designed to broadly represent the performance of all CTA programs in the BarclayHedge database that meet the inclusion requirements. To qualify for inclusion in the index, a program must have at least four years of performance history (or two years for additional programs from the same advisor). As of December 2014, the 535 programs in the index represented assets of approximately $232 billion.
The MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada.
Ryan Labs Ten Year Treasury Index.The Treasury yield curve is the risk-free baseline that investors can use to measure the intrinsic value of any investment. The Ryan Treasury Index shown here display how interest rate changes affect returns usually in an inverse relationship (yields go down, returns go up and vice versa).
Consumer Price Index for U.S. City Average, Not Seasonally Adjusted
The Consumer Price Index for All Urban Consumers (CPI-U), produced by the Bureau of Labor Statistics (BLS), is the most commonly used measure of inflation in the United States. A measure that examines the changes in the price of a basket of goods and services purchased by urban consumers.
CME Group is a trademark of CME Group Inc. The Globe logo, CME and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. Chicago Board of Trade and CBOT are trademarks of the Board of Trade of the City of Chicago, Inc. New York Mercantile Exchange and NYMEX are trademarks of New York Mercantile Exchange, Inc. All other trademarks are the property of their respective owners.
S&P 500 is a trademark of The McGraw-Hill Companies, Inc., and have been licensed for use by Chicago Mercantile Exchange Inc.
Data sourced from BarclayHedge, Ltd., MSCI Inc., Ryan Labs Inc., and Bloomberg, L.P.
FUTURES TRADING IS NOT SUITABLE FOR ALL INVESTORS, AND INVOLVES THE RISK OF LOSS. FUTURES ARE A LEVERAGED INVESTMENT, AND BECAUSE ONLY A PERCENTAGE OF A CONTRACT’S VALUE IS REQUIRED TO TRADE, IT IS POSSIBLE TO LOSE MORE THAN THE AMOUNT OF MONEY DEPOSITED FOR A FUTURES POSITION. THEREFORE, TRADERS SHOULD ONLY USE FUNDS THAT THEY CAN AFFORD TO LOSE WITHOUT AFFECTING THEIR LIFESTYLES. AND ONLY A PORTION OF THOSE FUNDS SHOULD BE DEVOTED TO ANY ONE TRADE BECAUSE THEY CANNOT EXPECT TO PROFIT ON EVERY TRADE.