Magazine

Ways to Play Managed Futures


MANAGED ACCOUNT

MINIMUM: $250,000

PRO: Keeps investor money in separate accounts, which provides flexibility in terms of strategies and leverage.

CON: Depending on the manager's aggressiveness, the investor can lose more than originally invested.

PRIVATE COMMODITY POOLMINIMUM: $25,000

PRO: Provides access to the most current and intricate strategies.

CON: Commodity pools usually have large minimum investments and are available only to accredited investors.

FUND OF FUNDS

MINIMUM: $25,000

PRO: Diversifies an investor's money with multiple commodity trading advisers, which theoretically cuts risk.

CON: Adds another layer of fees to already expensive funds.

PUBLIC OFFERING

MINIMUM: $10,000

PRO: Open to people who make at least $70,000 and have $70,000 in investable assets; it's SEC-registered, and its strategies may be less risky.

CON: Fees are complex, and you can buy or sell only once a month.

MUTUAL FUND

MINIMUM: $2,500

PRO: The minimums are low, and you can buy or sell your fund daily.

CON: To meet SEC requirements, funds use watered-down strategies that are a far cry from complex programs run in most managed futures accounts.


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