
800-849-6346
Grains - Metals - Currencies
Stock Index & Financial Futures
Stocks & Bonds
(return
to home page)
Futures
Services |
|
Securities Services |
|
About the Firm |
|
Opening an Account |
|
|
|
|
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
|
|
|