During periods of market volatility, which is to say quite a bit of the time, a portfolio that is limited to traditional stocks and bonds may not be the best allocation strategy.
An investment portfolio that includes managed futures could be a hedge against market downturns.
But what proof can you show to prospective investors or advocates about the potential benefits of managed futures?
Altegris Advisors has the proof, shared in the attached fact sheet “Managed Futures: Performance during periods of equity market stress.”
The key takeaway: during the 11 worst quarterly equity market downturns for the 15 years ended June 2016, the worst managed futures performance was still 1.5% better than stocks, during the bank bailout crisis in the third quarter of 2008.
The highest positive differential for managed futures was in Q3 of 2008, during the WorldCom scandal, when managed futures outperformed stocks by 35.3%.
(Stocks were represented by the unmanaged S&P 500 Total Return Index; managed futures by the SG Trend Index. Past performance of course cannot predict future similar results.)
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