Diversified managed futures funds or Commodity Trading Advisors (CTAs) are the most profitable asset class in a bear market and severe corrections. In the September 2001 mini-crash (9/11) and in the 2002 bear market, managed futures trading advisors recorded impressive profits versus broad declines for conventional mutual funds and global indexes. Managed futures represent a maximum 10% allocation in the ENR Bullet Portfolio.

Managed futures have grown into a legitimate asset class since the late 1980s, and have substantial clients, including Intel, IBM and General Electric.

An example of a diversified single-advisor managed futures portfolio is Man-AHL Diversified Fund PLC. AHL’s Diversified Trading Program trades over 100 global futures and options contracts 24-hours per day. Using an intricate trend-following system, AHL Diversified seeks to isolate rising and declining price trends in commodities, interest rates, currencies, stock indices and precious metals. The Fund has maintained negative correlations to common stocks since 1991, offering optimal upside returns amid market chaos and equally, profits during rising market cycles.

Managed futures funds, unlike conventional mutual funds, can prosper in any economic environment because they can invest long or short. Managed futures funds can trade multiple asset classes, unlike stock funds, which can only invest in equities or hold cash. Alternative investment products, like hedge funds and managed futures funds, can invest long and short in global stocks, and therefore provide the global investor with a higher margin of safety than conventional mutual funds, especially during difficult market conditions.