We recently had a potential client ask us some very pointed questions.
“You put all this information on your website about the different CTAs out there,” he said. “Why should I work with you? What’s stopping me from just making the investments on my own?”
It’s a fair question, and we’re sure this client is not the only one with it rolling around in their head. As such, we decided it might be a good time to highlight why working with a broker is a good idea if you’re considering managed futures.
- Access– Most people wouldn’t know how to begin finding CTAs to invest with. Brokers give investors access to a plethora of programs. Beyond initial exposure, they can also provide access to emerging CTAs, privately offered CTAs, and CTAs closed to outside investment. Plus, brokers may be able pull strings to make previously out of reach CTAs accessible by doing things like getting you in at lower minimums. Then again, as this potential client mentioned, you could just take the information off of our website and go it on your own. Does that make us dumb for giving you all this great information? Not quite, because we also offer…
- Perspective– Brokers spend all day watching the performance of various CTAs in an attempt to understand the what, why, how, where, and when of what they do, and to determine the direction they’re heading. This means they know what strategy creep looks like, know when a CTA has added too much risk, know when a manager might be going off plan- and can tell you. This process, called due diligence, is an investor’s best friend, and a broker’s job is to make sure it’s ongoing. It’s dedication to you and your investment.
- Free Lunch– Not literally, but figuratively. Working through a broker does not cost you a penny. You’re going to pay the same amount of fees going through a broker as you would going straight to a CTA. That means you’re getting all of the above benefits for free.
So let’s recap. If you go out on your own, you find yourself searching and sifting through programs and their data, and maybe you find a program that fits. If you go through a broker, you have instant access to this data, knowledgeable advisors who can help you allocate your funds wisely, and you don’t make have to pay for it.
Perhaps the real question is, why wouldn’t you work with a broker?
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.