What makes futures attractive to today's institutional and retail investor is the ability to profit in any economic environment and the ability to achieve greater diversity from their traditional investment portfolio.
Further, through the use of global futures markets, CTA's can seek profit anywhere futures are traded. However, please be aware that futures trading does involve substantial risk and is not suitable for all investors.
Commodities are a true alternative investment. While many so called alternative investments (like hedge funds) are really no more than alternate strategies within an existing
asset class, futures provide diversification into a true
alternative asset class through exposure to commodity
markets.
Venture capital, private equity, and many hedge funds are actually
an extension of the equity class (stocks), not an alternate asset
class altogether.
In contrast, Powertrade brings exposure to a different asset
class in commodities , which provide economic value through being
consumed or transformed - not on the basis of future cash flows
like stocks and bonds.
Independent Research on Alternative Investing:
A study published by the Chicago Mercantile Exchange concluded
that portfolios with as much as 20% of assets in managed futures
"enhances portfolio diversity and therefore promotes greater
independence from general market moves".
According to Dr. Harry M. Markowitz, the Nobel prize-winning
economist and father of modern portfolio theory, portfolios with
decreased volatility and increased performance can be created by
diversifying among asset categories with low to negative
correlation, such as stocks and commodities. Subscribers to this
theory believe an investment portfolio containing alternative
investments with low to negative correlation stands to perform
better, with lower overall risk.
Derivative transactions, including futures, are complex and carry a risk of substantial losses.
They are intended for sophisticated investors who understand risk.