The firm is of the opinion that our customers are usually
best served through the use of some appropriate combination
of professional money management tools and alternative
investments. To that end,
the firm has several professionally managed internal
products such as individually managed futures accounts, institutional fixed
income management, and so
forth. In addition, we maintain relationships with
outside management firms and alternative investment firms.
Many of these programs emphasize what we like to call
non-traditional asset management. That is to say,
investment opportunities which offer the client an
opportunity of profiting in the face of declining stock and
bond markets, the "traditional investment" category. Such
programs as an
investment in rare coins, an investment in an equipment
leasing program, a real estate partnership of some sort, or
perhaps a futures trading program. As the need
for storage of technology increases, data centers are needed
(aka: "the cloud") and we have several offerings that
contain prime long termed leases on such centers.
We
are partial to the managed futures
programs. Some years ago, it was true that these sorts
of programs were not readily available to the average
investor, but rather were a vehicle used by the more
affluent investor. However, times have changed.
In the early 1970's a very few managed futures programs (and
individually managed accounts) were being used as a
management tool by a very few brokerage houses.
Gradually, over the years that number grew. However,
even today, this opportunity is perhaps one of the best kept
secrets of the investment world because although it has been
available for some time, most financial professionals and
brokerage firms do not utilize managed futures accounts to
any degree. The stellar performance of the American
equities markets of the eighties and nineties gave rise to
little need of examining so called alternative investments.
Additionally, this has not always been a large market, organizations
which track such data estimate that at the end of 2002,
global investments in managed futures programs amounted to
just over forty billion dollars. This figure is pale
in comparison to say the customer assets invested in just
the fidelity fund family (over one trillion dollars).
Perhaps this explains why a client may never have heard the
term "managed futures".
Extensive research has demonstrated that these programs have
the ability to profit in any economic or market environment,
and that the addition of managed futures programs into
traditional investment portfolios actually reduced
volatility and enhanced returns. Why not see what the
CME Group has to say:
Managed Futures.
The firm offers a wide array of these programs, hence we are
able to locate something suitable and affordable for any
client wishing to participate. Actual offerings of our
various programs are made only by disclosure document.
Please ask your investment professional for further
information on a program or programs which may be suitable
in your situation. Naturally all of the firm's
professional associates do not have expertise in this area,
but they are all able to refer a client to someone who does.
We believe this is an opportunity each investor needs to
evaluate.
All of that said, today's regulatory environment obliges us
to point out the following with regard to managed futures
programs:
-
such an investment is speculative in
nature and may involve a high degree of risk
-
an investor could lose a substantial
portion or all of their investment
-
such an investment should be
discretionary capital, set aside for speculative
investments
-
these programs are not suitable for all
investors
-
some programs may be leveraged making
performance more volatile
-
some programs may use a single advisor,
or employ a single strategy (or both) which may mean a
lack of diversification and consequently higher risk
-
some programs may execute a substantial
portion of transactions on foreign exchanges, which
could mean higher risk
-
an investment in some of these programs
may be illiquid (and without any secondary market) and
there are significant restrictions on transferring such
investments
-
there is no secondary market for
investments in most of these programs and none is
expected to develop
-
a programs fees and expenses may be
substantial and perhaps with no offsetting investment
return
-
some programs may involve complex tax
structures and consequently delays in distributing
important tax information
The above may not represent a complete list of all risks.
More complete disclosures are contained in each program's
offering document, which must be reviewed carefully.
