As managed futures have gained popularity over the past 20 years, the number of firms offering managed futures has also increased. Firms and advisors from all over the world have expressed the need for diversification, pitching the asset class to the everyday investor. Managed futures provide investors with an uncorrelated investment from traditional assets. The right mix of managed futures and traditional investments can lower overall portfolio volatility, but choosing the right managed futures firm to work with is just as important.
For over 15 years, the partners at aiSource have been screening, researching, and allocating to all different types of commodity trading advisors (CTAs) in the space. We’d like to say we have seen it all, however, every day is a new learning experience. As we gain more knowledge day by day, we try our best to pass that on to our investors in order to help them make the best investment decisions. Sometimes, finding the right firm/advisor to help you with your managed futures investments can be difficult. The team at aiSource put together a few points to research that will help investors find a quality firm to work with. When trying to find the right managed futures firm for you, question them on the following points to see if the firm meets your standards:
Years of Experience
It is important to know the experience level of the firm you are going to work with. Have they been in the space for a long time? Have they allocated to various CTA’s within the industry to give you the best possible advice? With over a decade of experience in managed futures, aiSource has experienced varying market conditions. Our investment team has combined industry experience of 40 years, and has learned how to manage our client portfolios to adapt to the continuous changes that we see today.
We’re Also Investors
This is an important one. How can an advisor recommend or advise you on CTA manager selection without being invested themselves in managed futures? If the advisor felt strongly about a certain manager don’t you think they would invest personally to take advantage of the strategy? Since its inception, aiSource has been investing company assets with many of the CTAs that we offer to our clients. This not only serves as a “show of confidence,” but also allows us to analyze a CTA from an investor’s perspective, and pass that analysis on to our clients.
In this day and age, transparency is everything. For years the managed futures space struggled to find a solution to help investors monitor their investments. When selecting a managed futures firm, it is important to ask them about the technology they will be able to provide you to monitor your investment. From the launch of aiSource, we made it our goal to simplify this process on behalf of our investors. With years of research and investigation, aiTracker was born. aiTracker is aiSource’s proprietary portfolio monitoring software, which grants full transparency to an investor. An investor is able to track their entire managed futures portfolio on a daily basis from virtually any computer, smart phone or tablet.
Full Team Effort
It is very common within the space to work directly with one specific advisor. Although an advisor may be a part of a large company, they all work independently having their own opinions and building portfolios with only their individual experience in mind. Often times, the advisors are all in separate locations and are not centralized in a main office. We operate slightly differently here at aiSource. All four of the founding partners of aiSource are centralized in one location. Anytime a new investor comes to aiSource, the four partners will collaborate with our advisors to put together the ideal portfolio of CTAs for that investor. This collective effort in portfolio construction and manager selection is also passed on to the various branches that aiSource has through the United States.
Amount of Capital Allocated
Although it might not be the best indication of selecting a quality firm, it still helps separate established firms from newer firms. As an investor, it’s necessary to know the experience and the amount of capital a potential firm has. Through years of experience, the partners of aiSource have collectively help allocate over $550 million in trading level to various Commodity Trading Advisors within the managed futures space.