If the 10 years ending in 2010 are considered the lost decade, managed futures could be considered the lost asset class. Largely ignored by the advisor community, the Managed Futures Index returned 10.23% annualized over the 30-year period ending December 2010. Barclays Capital U.S. Aggregate Bond Index returned an annualized 8.92% and the S&P 500 returned 10.71% annualized.
There is an argument posed by some financial professionals that managed futures should not even be considered an asset class. Regardless of your view, they have a very stabilizing effect on a portfolio. They also provide equity-like returns with bond-like volatility. They are non-correlated to every major asset class and, when allocated to a diversified portfolio of stocks and bonds, almost always lower the portfolio's standard deviation for all periods.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access