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Managed futures refers to an investment where a portfolio of futures contracts is actively managed by professional trading advisors, known as Commodity Trading Advisors (CTAs). Managed futures are considered an alternative investment and are often used by funds and institutional investors to provide both portfolio and market diversification. Managed futures provide this portfolio diversification by offering exposure to asset classes to help mitigate portfolio risk in a way that is not possible in direct equity investments like stocks and bonds. Although futures investments involve substantial risk and are not suitable for everyone, the introduction of managed futures into an investment portfolio has the potential to reduce risk and enhance performance.

Unlike the stock market, which offers investors partial ownership in a company and a proportional share of its gains and losses, an investment in Managed futures yields returns (or losses) based on the investment performance of a Commodity Trading Advisor (CTA). CTAs speculate on the price fluctuations of the various exchange-traded futures and options markets. CTAs and regulated by both the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).

For investors seeking returns beyond traditional assets and strategies, they often look to alternative investments like Managed futures, which provide the opportunity to invest in the futures and options markets.