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What are managed futures?

Managed futures are a type of hedge fund that trades in financial and commodity futures contracts anywhere in the world. They consist of a pool of futures contracts managed by professional money managers. Because the returns of managed futures advisors are not highly correlated to the performance of stocks or bonds, they are classified as alternative investments, and are often ideal strategies to help investors diversify more effectively.

Most managed futures fund managers apply a systematic approach to trading whereby they use technical and statistical analysis based on price and volume information to determine investment decisions. Trading decisions as a result are largely mechanical, whereby little or no personal discretion is used. Other fund managers will incorporate a share of discretion based on current economic and political fundamentals.