Investors and money managers interested in diversifying into Managed Futures are often attracted to the daily transparency and better liquidity that Managed Futures have over the typical hedge-fund structure. Professional money managers in the Managed Futures space are known by the regulatory designation of Commodity Trading Advisors (CTAs). However, with hundreds of CTA programs from which to choose, it can be daunting to know where to start one’s analysis of this investment space.
One place to begin is with CTA indices, which compile and track the performance of different CTA programs. This website, and the supporting white paper found here, summarizes and analyzes information on over ten CTA indices. The list chosen encompasses the most-oft used indices but it is not completely exhaustive. Finally, since up until now, much of this information has not been readily available, the purpose of this website and the white paper is to serve as an effective and efficient informational resource for the Managed Futures / CTA industry going forward.
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The risk of loss in trading commodities & futures contracts can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. 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. In some cases, managed commodity accounts are subject to substantial charges for management and advisory fees. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the Commodity Trading Advisor. The regulations of the Commodity Futures Trading Commission require that prospective clients of a CTA receive a disclosure document at or prior to the time an advisory agreement is delivered and that certain risk factors be highlighted. This document is readily accessible from Red Rock Capital, LLC. This brief statement cannot disclose all of the risks and other significant aspects of the commodity markets. Therefore, you should thoroughly review the disclosure document and study it carefully to determine whether such trading is appropriate for you in light of your financial condition. The CFTC has not passed upon the merits of participating in this trading program nor on the adequacy or accuracy of the disclosure document. Other disclosure statements are required to be provided you before a commodity account may be opened for you.
A Comparison of CTA Indices
by Thomas N. Rollinger
and Scott T. Hoffman