Legend Financial Advisors in Pittsburgh formerly accessed managed futures for clients through private CTA funds structured as limited partnerships, but has switched over entirely to ’40 Act funds. “You can’t beat daily liquidity,” say Jim Holtzman, a certified financial planner at the firm.

He notes that Legend’s main fund of choice is the AQR Managed Futures Strategy Fund. The fund’s investor share class has a $1 million minimum that the firm is able to partake in by grouping together clients into that fund. Legend recently added the 361 Managed Futures Strategy Fund to its managed futures sleeve.

“We still believe in the long-term track record of managed futures and that going forward they’ll help reduce risk in our portfolios and improve our risk/return profile,” Holtzman says.

Elsewhere, Envestnet now includes 36 managed futures mutual funds among the roughly 10,000 mutual funds on its wealth management platforms aimed at financial advisors, says Ryan Tagal, vice president of product management for Envestnet’s separately managed account program. Tagal, who previously covered alternative investments as a research analyst at Cerulli Associates and Morningstar, fully grasps the nuances of managed futures.

“If an investor has a longer-term time horizon and is using managed futures appropriately to provide some diversification in extreme drawdowns, then managed futures can be an appropriate investment,” he says.

When it comes to ’40 Act managed futures funds, though, advisors need to do their due diligence on costs and understand the interplay between different managed futures strategies and the overall economic and financial market environments. 

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