Education & Whitepapers
Great Pacific Wealth Management’s passion is to educate our investors while providing the means necessary to help fulfill their investment objectives. A cornerstone of this approach is to provide the most up to date and proactive research and educational pieces available today. We strive to educate investors and assist them in making knowledgeable investment decisions. By combining market leading futures research and macro economic analysis GPWM offers clients a full service education resource.
What are Managed Futures?
Managed Futures is a type of alternative investment that utilizes professional investment managers known as a Commodity Trading Advisor (CTA). These managers specialize in commodity, financial, and currency futures along with exchange traded options contracts. CTA programs are commonly referred to as Managed Futures accounts. A CTA actually manages individual client accounts, placing orders directly on the clients behalf. Investing with a CTA is like having your own professional futures trader.
Why choose Managed Futures?
- Non-correlated performance – Bear market protection
- Absolute Return Strategies
- Account transparency and liquidity
- Individually segregated client accounts
- Ease of broad market diversification
Non-correlated account performance
Traditionally considered a volatile and risky asset, futures investment is being shown as a volatility reducer due to its non-correlated performance with traditional investments. Following the asset allocation model of Dr. Harry Markowitz, investors have the potential to reduce overall portfolio volatility by adding non-correlated assets to the investment portfolio.
In 2008 managed futures investors found shelter from the storm in what turned out to be the greatest period of financial hardship since the Great Depression. One of two asset classes performing positively in 2008, CTA’s proved that volatile market environments can be a period of opportunity for the savvy trader.
Absolute returns in uncommon markets
Unlike there traditional counterparts, Managed Futures do not relay on an improving economy or price appreciation of the underlying asset in order to profit. A commodity trading advisor can buy futures ahead of an expected rise in price or sell a futures contract if they anticipate prices to fall. Option strategies further expand the investment tools available and can be used in down, sideways and up markets. Loss comes from placing a directional trade and the market moving in the opposite direction.
Non-correlated performance due to absolute return strategies make Managed Futures investing a perfect candidate for investors seeking true portfolio diversification.
Transparency and liquidity – unsung value for the managed investor
Marked to market accounting combined with the transparency to see value and risk in real time is essential in today investment climate. While traditional managed products deny this level of scrutiny to their investors, Managed Futures not only embraces this type of account structure, we promote it. While you cannot add this type of value to a monthly performance report we believe that near instant liquidity and fully transparency must be considered when weighing investment options.
Individual accounts & individual positions - full value futures investing
Another almost completely unique offering within the Managed Futures account structure is the fully segregated futures account. Not only are your investment funds NOT co-mingled, the investor has ownership of their own futures and option contracts. This allows full exposure to the price movement (positive or negative) allowing the investor to obtain the truest price action from each trade.
Ease of broad market diversification – access to world markets
Most investors today are looking for a way to invest what is being called the global growth opportunity. In our opinion there is no purer way to invest in this story than by using the futures marketplace. The US futures exchanges have become the worlds centralized clearing house for all raw commodity and futures products. Your CTA investment trades among the most liquid and deep markets in the world including crude oil, agricultural profits, precious metals, and foreign currency. Most markets trade nearly 24 hours per day giving CTA’s the ability to make investment decisions around the clock.