jtmlogo.gif (1816 bytes)

800-849-6346

Grains - Metals - Currencies
Stock Index & Financial Futures
Stocks & Bonds

(return to home page)

Commodity Trading Advisors

 

Many sophisticated investors have come to the conclusion over the last several years that diversifying a portfolio into areas other than equities is a prudent thing to do.  Although stock market gains have continued recently at a pace that has confounded even bullish analysts most thinking people agree that it is just a matter of time before the market reverts to its mean and suffers some kind of a serious correction.  Whether that correction takes the form of a short, steep, extremely scary, but only temporary sell-off, a la 1987 or a full blown bear market like ' 73-' 74 that takes a decade to recover from remains to be seen.   The other obvious problem with anticipating a stock market sell-off is the timing.  Waiting for the bear to surface in this market has been like waiting for Godot.  Even Alan Greenspan was at least 4,000 Dow points early in saying stocks were overvalued.  Therefore, the decision that many sophisticated investors are making, and which JTM Investments endorses strongly, is to continue to have exposure to the equity markets, but at the same time find an asset class to invest in that is non-correlated to the stock market, is a good investment just on its own merits, and which has shown an historical tendency to perform well during bear markets in equities.  Managed futures accounts have been shown in many academic studies to have all of these characteristics.  In fact, in many cases it can be shown that adding between 10 and 30% managed futures to an all equity account will not only add to the overall performance, but because of the non-correlation, will also reduce the volatility of the portfolio, in effect smoothing out the returns.  

At JTM Investments we are constantly looking for Commodity Trading Advisors(CTA's) that meet our criteria.  What we are looking for is a consistent track record, but also a consistent methodology to their trading approach and risk management, as well as personal integrity.  The second step to our approach is to find out what the client wants.  As in any investment there is a trade off between risk and reward (don't let the tout services convince you otherwise).  Depending on the client's risk tolerance we can increase or decrease the leverage in several of the programs we offer and we can also offer programs traded by newer CTA's that have extremely impressive, but relatively short track records or we can go with some of the most established long term CTA's.  

There are two basic kinds of managed futures investments that we offer - individually managed accounts and funds.  In an individually managed account  the client's account is held at JTM Investments and the CTA has discretion to make trades in that account.  Any commissions that are generated go entirely to JTM and the CTA is compensated primarily by a percentage of the profits in the account (usually between 20-30%).  In a fund the client's money is pooled with other investors and the client owns a percentage of that pool of money, similar to a stock mutual fund.  The CTA then trades that fund as if it were a single account and is compensated based on the profitability of the fund.  To take the fund concept one step further, we offer two types of funds - single advisor and multi-advisor.  A single advisor fund is obviously a fund that is managed by one advisor while a multi-advisor fund has several CTA's who are allocated varying portions of the fund by a trading manager.  There are advantages to both the individual managed account and the fund account.  In an individual managed account there are generally lower fees because the investor does not have to pay any of the expenses of organizing a fund.  Also, the client can often times customize the amount of leverage he would like the CTA to use in his account increasing or decreasing the risk levels and commensurate returns to the level he is comfortable with.  The main advantage of a fund is that it is often the only way for the average investor to get access to some of the top CTA's in the world.  Once a CTA has established an impressive long term track record and has substantial assets under management the minimum individual investment with him will probably be $1,000,000 or more. A fund will generally allow investments in the $25,000 to $50,000 range.  In a multi-advisor fund this benefit is multiplied because the investor actually has access to a diversified group of CTA's that would be a minimum investment of several million dollars if done on an individual basis.                  

Because the access we have to various CTA's changes from time to time because of the availability of funds open to new investors we ask that you contact us at (800)849-6346 or e-mail us at jmurphy@jtminvest.com for a current list of our recommended CTA's and funds.  We would also like the opportunity to talk with our investors personally to find out exactly what their risk tolerance is and what they are looking for in an investment.  However, there is one fund currently open for investment that we would like to highlight because of their long term track record, strict risk management principles, affordable investment minimum, and applicability to many different different investors.  This fund is the BG Chesapeake 2XL Fund LP.  The general partner of the fund is the Bonhoft Group, a well known "manager of managers" and the trading advisor is Chesapeake Capital Corp.  Chesapeake Capital manages over $1 billion and was formed in 1988 by Jerry Parker.  Mr. Parker began his futures trading career in 1983 as a member of the group which became known to this industry as the "Turtles".  This group was handpicked and trained by a well known futures trader to prove that trading futures successfully was a science and not an innate talent.  When that program ended in 1988, after almost five years trading proprietary capital Mr. Parker decided to continue his professional trading career by forming Chesapeake.  From 1988 to 1993 the Chesapeake Diversified Program had returns of 49.10%(11 mos.), 28.30%, 43.12%, 12.51%, 1.81%, and 61.82%.  In 1994 the Chesapeake 2XL Fund was started and has had annual returns of 26.88%(9 mos.), 18.77%, 18.17%, 15.96%, and 21.82%.  For many reasons this fund is one of our favorite investments for a wide variety of clients.  For a disclosure document or more information on this fund or any other managed futures investments call or e-mail us at the number or address given above.       

 

Please Contact us at:

Phone:  800-849-6346
E-Mail:  jmurphy@jtminvest.com