1	Why Smart Money Invests in Managed futures 10 Compelling reasons to consider Managed Futures David Lerman March 25, 2009
2	10 Compelling Reasons for Managed Futures Diversity beyond the traditional asset classes of stocks/bonds/cash Reduces overall portfolio volatility (zig/zag theory) Potential to increase returns along with reduction in volatility Returns can be generated in any kind of economic environment and bull and bear markets Performance during major stock market declines has been remarkable Many successful pension plan sponsors have long utilized Managed futures to generate alpha Typical CTA /Pool Operator has wide variety of global futures products that are the most transparent and liquid instruments in existence CTA/CPO community is regulated and they trade mostly on regulated futures exchanges throughout the world. ….and these exchanges have sophisticated risk management in the form of clearing houses Overall, the growth of the industry has been exceptional…giving further credence to managed futures as excellent addition to any asset allocation strategy
3	Investment Universe-Various Asset Classes
4	Various Managed Futures Benchmarks
5	Efficient Frontier—with managed futures allocation
6	Managed futures and potential to lower overall risk
7	Diversification Benefits
8	10 Compelling Reasons for Managed Futures Managed futures performance vs. other asset benchmarks over time (including major secular bull market of 80s and 90s, the crash of 87 and several bear markets) Returns Benchmark 1980 – 2008 Managed Futures Funds +12.8% S & P 500 +10.7% World Stocks (MSCI EAFE) + 9.5% Money Market inst. (T-bills) + 5.6%
9	Performance Comparison: Stocks vs International stocks vs Managed futures
10	10 Compelling Reasons for Managed Futures Managed futures performance during severe declines in S&P 500 Managed futures vs. other asset classes during the 2008 market rout Benchmark 2008 Performance Managed Futures Funds +18.33% Managed Futures CTAs +14.11% S & P 500 - 38.49% Hedge funds - 19.07% World Stocks - 43.07% Real Estate - 43.12% Sources: Credit Suisse Tremont Managed Futures index, Barclay’s CTA index, CME Group, Credit Suisse Tremont Hedge fund index, MSCI world index Dow Jones Wilshire Real Estate Index
11	10 Compelling Reasons for Managed Futures Managed futures performance during severe declines in S&P 500 Managed futures performance during the worst stock market declines in recent history: Event S&P 500 BTOP 50 Index Crash of 87 -23.23 % + 16.88% Terrorist attacks WTC 9/11 -14.99% + 4.12% Iraq invades Kuwait 1990 -14.52% + 11.22% 1998 Russian defaults/LTCM -10.30% + 10.54% Tech bubble bursts 2000 - 8.09% + 19.78%
12	More on Risk: Worst Drawdowns of various markets
13	10 Compelling Reasons for Managed Futures Returns in general….those that can overcome their fears of investing in futures, either directly or via Managed futures sometimes have very high expectations of returns given the nature of the investment. Lets look at returns from several perspectives… Long term returns of S&P 500 10-13% over past 75 years Long term returns of bonds 4-6 % over past 75 years Long term returns of T-bills under 3 % Berkshire Hathaway return since Inception of partnership by Warren Buffett 21 % Long term returns of the very best Hedge funds 25-35%
14	The Variety of Global Futures Products- A partial list
15	Growth of Assets of Managed Futures Industry
16	Disclaimer