One of our most popular blog posts: a list of the top FCMs (based on customer funds held in segregation) has been updated with end of 2021 numbers. When doing research in selecting a futures commission merchant, or FCM, (i.e. custodian) to house your managed futures portfolio, it can be difficult to find a resource to assist in your decision-making process. The best tool the aiSource team has found is the data put together by CFTC that lists the all the FCMs each year based on total customer equity. Our 2022 ranking contains the top 40 FCMs based on customer funds as of November 30th, 2021. Please keep in mind that there is a total of 62 FCMs on the CFTC list. Here our Top 40 Rankings:
One major thing that stands out on this year’s FCM list is how much customer assets in seg have increased almost across the board at the FCMs. Total assets in segregation of the Top 40 FCMs last year was ~$248 Billion; this year’s total is ~$260 Billion. If you compare this year’s list to the FCM list from 2021 you’ll notice that some of the top FCMs have increased their customer assets by more than 50% and as high as 70% in some cases! While some FCMs have benefited from mergers, such as, StoneX acquiring GAIN Capital, others have grown organically. We feel the reason for the increase is largely fueled by investor demand for managed futures strategies. With stock market valuations near all time highs, investors are finally looking to diverse their stock heavy portfolios. Another contributing factor to the increase in assets is the increased popularity of crypto futures and the major adoption of micro contracts.
The top eight FCMs on the list are institutional specific FCMs that do not house accounts smaller than $10M in size. FCMs that aiSource uses to house its clients’ accounts all fall between spots eleven through thirty-five: R.J. O’Brien, (#11), StoneX (#15), Marex North American (#20), Phillip Capital (#28) and Dorman Trading (#36). R.J. O’Brien is the largest FCM that is available to all types of clients; as of November 30th, 2021, they had $6.3 billion in client funds. The FCM selection process is different based on the specific needs of each client, and our clients are divided amongst the six FCMs that we use.
Some FCMs that managed futures investors should stay away from are the ones that are not equipped to handle managed futures accounts. Time and time again, aiSource has seen novice investors get attracted by “low commissions,” and open an account with Interactive Brokers (#11) or TradeStation (#27) and face hardship when facilitating the needs of a managed account. Interactive Brokers and TradeStation are both great FCMs, but they are better suited for self-directed traders.
As an independent brokerage/investment advisory firm, aiSource has the ability to house its client accounts at any FCM. We are always looking to develop new FCM relationships and offer those to our clients, but based on our experience, R.J. O’Brien, StoneX, Marex, Phillip Capital, and Dorman Trading are some of the best firms at handling managed futures investors.