When choosing a Commodity Trading Advisor (CTA) to invest with, one category that must be considered is emerging CTA's. Generally speaking, an emerging CTA is one whose track record is less than five years long and has less than $100 million dollars under management. While it's often most comfortable to invest with a CTA that has a long and successful track record and has hundreds of millions of dollars under management, there can be real benefits to investing with an emerging CTA.
One of the biggest benefits is the potential for better risk-adjusted performance. The reason for this is because emerging CTA's are not weighted down by their size. Specifically, these CTA's can move into and out of markets easier and are able to trade markets that are not liquid enough for large CTA's. My research has clearly shown me that being able to trade a greater number of markets is a big benefit. Large CTA's are often confined to only trading markets such as financial instruments, energies and metals. This leaves them missing out on opportunities in many other traditional commodity sectors such as grains like soybeans, corn and wheat in addition to foods such as coffee, sugar, cocoa, cattle, pork and also fibers like cotton. Once again, missing out on these markets can come at a great price.
Another benefit with emerging CTA's is that there minimum account size is often less than it is with more established CTA's. For example, Hoffman Asset Management Inc. will trade a diversified portfolio of over 70 markets with a minimum account size of only $125,000. It is not unusual for more established CTA's who are trading as many markets to have minimum account sizes of $1,000,000 or more.
In summary, when you combine the benefits of potentially better performance and smaller minimum account sizes you can see that the emerging CTA can represent the right solution for many investors.
Dean Hoffman
Hoffman Asset Management, Inc.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS INHERENT IN FUTURES TRADING IS SUBSTANTIAL. AN INVESTOR COULD POTENTIALLY LOSE MORE THAN THE INITIAL INVESTMENT. INVESTORS MUST READ THE CURRENT DISCLOSURE DOCUMENT BEFORE THEY INVEST. A COMPLETE DISCUSSION OF FEES AND CHARGES ARE REPORTED IN THE CTA's DISCLOSURE DOCUMENT.
Mr. Dean Hoffman attended Pennsylvania State University where he studied computer science. In 1987 Mr. Hoffman initially began his career as a commodity broker and worked for several large futures commission merchants in Chicago. After many years as a broker, Mr. Hoffman formed his own trading firm at the Chicago Mercantile Exchange. Throughout this period Mr. Hoffman intensively researched and developed algorithmic trading systems. In 2001 Mr. Hoffman formed a financial software firm, Strategic Trading Systems, that markets algorithmic trading systems. This firm is a corporation that has been registered with the CFTC as a commodity trading advisor since February 2000, and Mr. Hoffman has been registered with the CFTC as its sole associated person since that date. In June 2004 Mr. Hoffman formed Hoffman Asset Management Inc. He became registered with the CFTC as an associated person of Hoffman Asset Management Inc. on August 4, 2004, and he became an NFA Associate on the same date. Mr. Hoffman is responsible for all trading decisions as well as the day-to-day operations of the Advisor.
Mr. Hoffman resides in Central Pennsylvania with his wife and three children.
Website: http://www.hoffmantrading.com
Article Source: http://EzineArticles.com/?expert=Dean_Hoffman
Posts
No comments:
Post a Comment