There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Why Managed Futures
2017
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
EVOLVING WITH INVESTORS’ NEEDS IN MIND
Founded in 2003, Equinox Funds has progressed
from a specialist in multi-strategy managed futures
investing to a comprehensive alternative investment
provider with multiple offerings across global
managed futures, commodities and hedged equity
asset classes.
Of course, not every investment works for every
investor. With a wide-ranging selection of
alternative investment options, Equinox Funds
encourages investors to work with their advisors to
determine which alternative investments may work
best within their overall portfolios. help meet the
unique goals of each investor.
ABOUTEQUINOX FUNDS
2
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
• Managed futures often engage in leveraging and other speculative investment practices that may increase the risk of investment loss.
• Managed futures can be highly illiquid.
• Managed futures are not required to provide periodic pricing or valuation information to investors.
• Managed futures may involve complex tax structures and delays in distributing important tax information.
• Managed futures are not subject to the same regulatory requirements as mutual funds.
• Managed futures often charge high fees.
INVESTMENTS IN MANAGED FUTURES ARE SPECULATIVE, INVOLVE RISK, AND
ARE NOT SUITABLE FOR ALL INVESTORS. IN ADDITION TO NORMAL INVESTMENT
RISKS, MANAGED FUTURES INVESTMENTS ENTAIL CERTAIN RISKS, INCLUDING,
IN ALL OR SOME CASES:
3
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Managed Futures
• What are they?
• History
• Potential Benefits
• CTAs and the case for active management
• Market environment
AGENDA
Investing in Managed Futures
• Liquidity and transparency
• No directional bias
• Diversification
Recap
4
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
CurrenciesUS Dollar
EuroBritish Pound
Japanese Yen
Equity IndicesS&P 500®
DAX (German)CAC-40 (French)
FTSE (British)
Interest RatesTwo-Year Notes (US)Ten-Year Notes (US)
German BundEurodollar
EnergyNatural GasCrude OilGasolineHeating Oil
Agricultural ProductsCornSoybeansCoffeeCattle
Definitions of Terms and Indices can be found on page 28.
Managed Futures
Physical Commodities
MetalsGoldSilverCopperLead
MANAGED FUTURES
is an alternative asset class in which Commodity
Trading Advisors (CTAs) seek to generate returns
using primarily futures contracts on financial instruments, such as currencies, treasury
bonds, equity indices, & physical commodities
such as corn, oil, gold, & sugar.
Financial Instruments
‹#›
5
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Source: BarclayHedge Alternative Investment Database, 2016. Definitions of Terms and Indices can be found on page 28.
Managed Futures Assets Under Management1980 – 2016
Managed Futures: An alternative asset class in which Commodity Trading Advisors (CTAs) seek to generate returns using primarily futures contracts on financial instruments and physical commodities.
• Potential for attractive long-term, risk-adjusted returns
• Different drivers of returns, which historically has resulted in low correlations to traditional asset classes
• Efficient global diversification across multiple sectors and markets
• Potential safety and liquidity of exchange-traded futures contracts
• Have historically shown the ability to provide “crisis alpha”
No amount of diversification or correlation can ensure profits or prevent losses.
MANAGED FUTURES
History
6
2016 AUM as of 9/30/2016
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
• Potential to provide attractive long-term risk-adjusted returns
• Ability to dampen equity drawdowns
• Distinct drivers of returns, hence low correlations to traditional asset classes
• Ability to add alpha during times of equity crisis
• Efficient global diversification across multiple sectors and markets
• Potential safety and liquidity of exchange-traded futures contracts
• Ability to employ notional leverage without the need to borrow
additional funds
Definitions of Terms and Indices can be found on page 28.
Reduced correlation and/or diversification does not ensure profit or prevent losses.
MANAGED FUTURES
THE POTENTIAL BENEFITS
7
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Who are Commodity Trading Advisors?
• Trade mainly exchange-listed futures in six sectors and150+ markets on global exchanges
• Use mainly quantitative models to identify trend-formation and trade entry and exit
• Using both long and short positions, seek to profit from both bullish and bearish trends in prices (unlike long-only strategies)
• Trade over multiple timeframes (from intra-day to long-term)
• Encompass a multitude of trading styles (systematic, discretionary, relative value, contrarian, etc.)
• Employ rigorous position sizing, stop-loss limits, volatility targets, and other tools that seek to mitigate risk
Definitions of Terms and Indices can be found on page 28.
MANAGED FUTURES
CTAs and the Case for Active Management
8
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
CTAs and the Case for Active Management
Definitions of Terms and Indices can be found on page 28.
CTA TRADING STYLE
TARGET VOLATILITY
Diversified trend-followingDiscretionary/Systematic Global MacroRelative Value
Other
5%10%15%20%25%
CTA trading styles are represented by the distance from an axis.
CTA target volatility is represented by the distance from the origin.
H2O
FORT
WNTN
QuanticaKeyQuant
QTI
Emil van Essen
Crabel
Systematica
QIM
J E Moody
Discretionary/ Global Macro
DiversifiedTrend-following
Other
Relative Value
IPM
MANAGED FUTURES
Chesapeake
Campbell
AspectBH-DG
Quantmetrics
QMS
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
The Inverse Relationship Between Interest Rates and Stocks
Source: www.barclayhedge.com
Definitions of Terms and Indices can be found on page 28.
January 1970 – December 2016
Past performance does not guarantee future results.
Displayed indices are for informational purposes only and are not meant to represent the Fund. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features.
10
MANAGED FUTURES
Market Environment
Equity markets are at or near all-time highs
Interest rates are at or near all-time lows
Strategists have expressed concerns about the
sustainability of the run in equities given that “real”
economies are growing slowly
Expansive monetary and fiscal policies are igniting fears
of inflation
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Past performance does not guarantee future results.
Reduced correlation and/or diversification does not ensure profit or prevent losses.
*Source: Prospects for CTAs in a Rising Interest Rate Environment by Campbell & Company, January 2013.
11
MANAGED FUTURES
Market Environment
Given the global economic environment,
it may be difficult to justify increasing, or
even maintaining current investor
portfolio allocations to the equity and fixed
income sectors.
• The past returns on managed futures exhibit low correlations to returns of more traditional asset classes, such as stocks and bonds.
• Studies* over longer time periods have shown that unlike equities and bonds, the performance of managed futures has not been interest rate-dependent
• Rising interest rates offer CTAs the potential to earn returns through short positions in fixed income and also to earn higher interest income on cash positions. However, there is no assurance the investment objective will be achieved or maintained.
Given their low correlation to bonds and other traditional asset classes, along with the relative
non-dependence of their historical performance on interest-rate regimes, managed futures offer
investors an interesting alternative in today’s environment
Definitions of Terms and Indices can be found on page 28.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
LIQUIDITY AND TRANSPARENCY
12
INVESTING IN MANAGED FUTURES
NO DIRECTIONAL BIAS
DIVERSIFICATION
Definitions of Terms and Indices can be found on page 28.
Managed futures are subject to liquidity risk. Investments in illiquid securities or derivative instruments may lead to the risk of being unable to sell the security or derivative instrument or sell it at a reasonable price. Diversification does not ensure profit or prevent losses.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
CADCanadian Dollar
BZ Brent CrudeCL Crude LightNYMEX Natural GasRBOB GasolineWTI Crude Oil
NKY Nikkei 225TPX Tokyo Stock Ex
JPYJapanese Yen
HKDHong Kong Dollar
AUDAustralianDollar
CHFSwiss Franc
UKX FTSE 100SX5E Euro Stoxx
SMI Swiss Mkt IdxDAX German Stk Indx
GBPBritish Pound
EUREuro
GEEurodollar
GCGold
CCoffee
SBSugar
IBOVBrazil Stock Ex
BRLBrazilian Real
USDUS Dollar
SPX S&P 500®
NQ NasdaqDJIA Dow JonesEMD Midcap 400
INMEXMxn Stock Ex
MXNMexican Peso
SISilver
AL AluminumHG CopperPA Palladium
UB Ultra T-BondZT 2-Yr US TreasuryZF 5-Yr US TreasuryZN 10-Yr US TreasuryZN 30-Yr US Treasury
HE Lean HogsLE Live CattleZC CornZS SoybeansZW Wheat
BJPN Bank of J Sov. BondJGB10 Japanese 10-Yr
Agricultural commodities
Currencies
Energy
Equity indices
Interest rates
Metals
KEY
PDPalladium
SISilver
ASXAustralian Ex
PDPalladium
GCGold
JSE So. African Ex
Access to opportunities in a broad range of global liquid markets
13
INVESTING IN MANAGED FUTURES
LIQUIDITY AND TRANSPARENCY
Definitions of Terms and Indices can be found on page 28.
For illustrative purposes only.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
TRADITIONAL VERSUS ALTERNATIVE INVESTMENTS
TRADITIONAL
LONG ONLY
STOCKS
BONDS
STOCKS + BONDS MARKET DIRECTIONSENSITIVE
ALTERNATIVES
LONG + SHORT A BROAD RANGEOF ASSET CLASSES
MARKET DIRECTIONAGNOSTIC
COMMODITIES
CURRENCIES
STOCKS
BONDS
CONSTRAINED
UNCONSTRAINED
LIQUIDITY AND TRANSPARENCY
14
INVESTING IN MANAGED FUTURES
Definitions of Terms and Indices can be found on page 28.
For illustrative purposes only.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 15
INVESTING INMANAGED FUTURES
No Directional Bias
Worst Historical Losses Among Asset ClassesJanuary 1998 – December 2016
Compound ROR (A) Max Drawdown Standard Deviation (A)
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
Barclays Aggregate Bond
Index
Barclay BTOP50 Index
HFRX Global Hedge Fund
Index (HFR98)
S&P 500 Total Return Index
DJ US Real Estate TR USD
S&P GSCI Total Return
Bonds EquitiesManagedFutures
HedgeFunds Long/ShortEquity
RealEstate
Definitions of Terms and Indices can be found on page 28.
The above chart demonstrates the past performance differences in the indices of various asset classes and is not intended to represent any Equinox Funds. Each asset class has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investment decisions. Displayed time periods in this chart have the benefit of hindsight and there is no assurance the performance will behave the same way in the future. The indices shown are for informational purposes only and are not reflective of any investment. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 16
INVESTING INMANAGED FUTURES
No Directional Bias
Performance of Managed Futures During Equity DeclinesEquity declines of at least 5% per month 2000 – 2016
Equities Managed Futures
Equities are represented by the S&P 500® Total Return Index. Managed Futures are represented by the Barclay BTOP50 Index®. Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges. Source: PerTrac Financial Solutions. The selected periods are used for illustrative purposes only and may not correspond with the precise starting and ending dates surrounding any particular period of crisis, real or perceived. Each of these asset classes has its own set of investment characteristics and risks, and investors should consider these risks carefully prior to making any investments.
Definitions of Terms and Indices can be found on page 28.
-20%
-15%
-10%
-5%
0%
5%
10%
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 17
INVESTING INMANAGED FUTURES
No Directional Bias
Performance of Managed Futures During Positive Equity MarketsEquity returns of at least 5% per month 2000 – 2016
Equities are represented by the S&P 500® Total Return Index. Managed Futures are represented by the Barclay BTOP50 Index®. Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges. Source: PerTrac Financial Solutions.
The selected periods are used for illustrative purposes only and may not correspond with the precise starting and ending dates surrounding any particular period of crisis, real or perceived. Each of these asset classes has its own set of investment characteristics and risks, and investors should consider these risks carefullyprior to making any investments.
Definitions of Terms and Indices can be found on page 28.
-10%
-5%
0%
5%
10%
15%
Equities Managed Futures
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
Equities Currency Int'l Equities REITs Long-Only CMDTY Cash Equity L/S Hedge Funds Bonds Managed
Futures
-0.17 -0.12 -0.05 -0.02 0.04 0.08 0.08 0.21 0.25 1.00
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
Cor
rela
tion
Coe
ffic
ient
18
INVESTING INMANAGED FUTURES
Diversification
Historical Correlation of Various Asset Classes to Managed FuturesJanuary 2000 – December 2016
Definitions of Terms and Indices can be found on page 28.
S&P500® TotalReturnIndex
BarclaysCapitalUSAggregateBondIndex®
S&PGSCI®TotalReturn
Index
HFRX®Global
HedgeFundIndex
BarclaysBTOP50Index®*
TheICEFuturesUSDollarIndex(USDX®)
DowJonesREIT
CompositeIndexSM
HFRX®Equity
HedgeIndex
MSCI® EAFE®Index
3-MonthT-BillRate
Currency Equities
-0.17-0.12
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 19
INVESTING INMANAGED FUTURES
Managed Futures volatility has decreasedJanuary 2000 – December 2016
DiversificationBarclay BTOP50 Index® S&P 500® Total Return Index S&P GSCI ® Total Return
Illustration based on rolling 12-month periods.
Managed Futures are represented by the Barclay BTOP50 Index®. Equities are represented by the S&P 500® Total Return Index. Long-only Commodities are represented by the S&P GSCI® Total Return Index. Source: PerTrac Financial Solutions.
Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Definitions of Terms and Indices can be found on page 28.
0% 5%
10% 15% 20% 25% 30% 35% 40% 45%
Ann
ualiz
ed s
tand
ard
dev
iatio
n
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 20
INVESTING INMANAGED FUTURES
Growth of a $10,000 Investment in Managed Futures, Stocks, and Long-Only Commodities
January 2000 – January 2016Diversification
$19,837$21,167
$8,727
Illustration based on rolling 12-month periods.
Managed Futures are represented by the Barclay BTOP50 Index®. Equities are represented by the S&P 500® Total Return Index. Long-only Commodities are represented by the S&P GSCI® Total Return Index. Source: PerTrac Financial Solutions.
Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Definitions of Terms and Indices can be found on page 28.
Managed Futures Equities Long-Only Commodities
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 21
INVESTING INMANAGED FUTURES
Managed Futures Performance During Equity Drawdowns
Diversification
Managed Futures are represented by the Barclay BTOP50 Index®. Equities are represented by the S&P 500® Total Return Index. Long-only Commodities are represented by the S&P GSCI® Total Return Index. Source: PerTrac Financial Solutions.
Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Definitions of Terms and Indices can be found on page 28.
January 1987 – December 2016
-29.72%
-14.69% -15.38%
-44.73%-50.95%
8.46%13.79%
5.42%
38.97%
14.47%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
9/87- 11/87
6/90- 10/90
7/98- 8/98
9/00- 9/02
11/07- 2/09
Mon
thlyPercentage(%
)
Managed Futures Equities
Historical drawdowns in equity markets have
been substantial
Adding diversifying assets to a portfolio offers the
potential to mitigate this effect
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 22
INVESTING INMANAGED FUTURES
Portfolio Drawdown Analysis
Diversification
Managed Futures are represented by the Barclay BTOP50 Index®. Equities are represented by the S&P 500® Total Return Index. International Equities are represented by the MSCI World Index. Bonds are represented by The Barclays Capital US Aggregate Bond Index®. Source: PerTrac Financial Solutions.
Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Definitions of Terms and Indices can be found on page 28.
January 2000 – December 2016
Managed Futures may improve the
characteristics of mosttraditional portfolios
Managed Futures Equities 50%Equities,40%Bonds,10%Int’lEquities(Rebalanced monthly)
40%Equities,40%Bonds,10%Int’lEquities,10%ManagedFutures(Rebalanced monthly)
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program.
MANAGED FUTURES
23
INVESTING IN MANAGED FUTURES: A RECAP
CTAs
INVESTING IN MANAGED FUTURES
Definitions of Terms and Indices can be found on page 24.
Managed futures are subject to liquidity risk. Investments in illiquid securities or derivative instruments may lead to the risk of being unable to sell the security or derivative instrument or sell it at a reasonable price. Diversification does not ensure profit or prevent losses.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 24
EQUINOX FUNDS
ONLINE – visit equinoxfunds.com for:
1 Detailed Fund Information and Literature
2 Daily NAV
3 Insights and White Papers
4
5 Business Building Ideas
Industry News and Events
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 25
EQUINOX FUNDS
DEFINITIONS OF TERMS AND INDICES
1
Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha.
Annualized Rate of Return is the geometric average return for a period greater than or equal to one year, expressed on an annual basis or as a return per year.
Annualized Standard Deviation (Volatility) measures the degree of variation of monthly returns around the mean (average) return. The higher the volatility of the investment returns, the higher the annualized standard deviation will be.
Bonds – The Barclays Capital US Aggregate Bond Index® covers the USD-denominated, investment-grade, fixed-rate, taxable bond market of SEC-registered securities. The index includes bonds from the Treasury, Government-Related, Corporate, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS sectors.
Correlation indicates both the strength and direction of the relationship between the independent and dependent variables. Values of r range from -1.0, a strong negative relationship, to +1.0, a strong positive relationship. When r=0, there is no relationship between variables x and y.
Currency – The ICE Futures US Dollar Index (USDX ®) is a leading benchmark for the international value of the US dollar and the world’s most widely recognized, publicly traded currency Index. A
Drawdown is the peak-to-trough decline during a specific record period of an investment, fund or commodity.
Equities are a stock or any other security representing an ownership interest.
Derivative Contract is a financial contract which derives its value from the performance of another entity such as an asset, index, or interest rate, called the “underlying.” Derivatives are one of the three main categories of financial instruments, the other two being equities (i.e. stocks) and debt (i.e. bonds and mortgages). There is no assurance that the a Fund’s investment in a derivative instrument with leveraged exposure to certain investments and markets will enable the Fund to achieve its investment objective.
Discretionary Trading is a trading approach that uses fundamental analysis of underlying economic factors.
Diversified Trend-Following is a Trend-Following Strategy (Page 37) that encompasses all three horizons – short, medium, and long-term.
Equities – The S&P500 ® Total Return Index is widely regarded as the best single gauge of the US equities market. This world-renowned Index includes 500 leading companies in leading industries of the US economy. Although the S&P500 focuses on the large cap segment of the market, with approximately 75% coverage of US equities, it is also an ideal proxy for the total market.
Equity Long/Short – The HFRX ® Equity Hedge Index is an index comprised of both long and short positions in primarily equity and equity derivative securities.
A Futures Contract is a standardized contract between two parties to buy or sell a specified asset of standardized quality and quantity for a price agreed upon today (the futures price or strike price) with delivery and payment occurring at a specified date, the delivery date.
Hedge Funds – The HFRX ® Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe. It is composed of all eligible hedge fund strategies, including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. The strategies are asset weighted based on the distribution of assets in the hedge fund industry.
International Equities – The MSCI ® EAFE ® Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. Past results do not guarantee future results. There is a risk of loss. You can lose money in any investment program. 26
EQUINOX FUNDS
DEFINITIONS OF TERMS AND INDICES
1
Long Only Commodities – The S&P GSCI® Total Return Index is widely recognized as a leading measure of general price movements and inflation in the world economy. It provides investors with a reliable and publicly available benchmark for investment performance in the commodity markets, and is designed to be a “tradable” index.
Managed Futures – The Barclay BTOP50 Index® (“BTOP50”) seeks to replicate the overall composition of the managed futures industry with regard to trading style and overall market exposure.
Market Agnostic investing seeks to earn profits by taking long or short positions depending on whether markets or instruments are trending up or down, respectively. This is in contrast to directional (or long only) investing, which is generally constrained to holding only long positions.
Notional Leverage refers to the total value of a leveraged position’s assets.
An Option is a contract that gives the buyer (the owner) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date. The seller incurs a corresponding obligation to fulfill the transaction – that is to sell or buy – if the owner elects to "exercise" the option prior to expiration. The buyer pays a premium to the seller for this right. An option that conveys to the owner the right to buy something at a specific price is referred to as a call; an option that conveys the right of the owner to sell something at a specific price is referred to as a put. Both are commonly traded, but for clarity, the call option is more frequently discussed.
REITS – The Dow Jones REIT Composite IndexSM aims to represent all publicly traded real estate investment trusts (REITs) included in the Dow Jones Indices US stock universe and covers approximately 100% of the total REIT market value
Risk-Adjusted Return is a concept that refines an investment’s return by measuring how much risk is involved in producing that return, generally expressed as a number or a rating.
Spread Trading – Spread Traders simultaneously purchase of one security and sell a related security. Spread trades are usually executed with options or futures contracts, but other securities are sometimes used. They are executed to yield an overall net position whose value, called the spread, depends on the difference between the prices of the securities. Spread trades are executed to attempt to profit from the widening or narrowing of the spread, rather than from movement in the prices of the securities directly. Spreads are either “bought” or “sold” depending on whether the trade will profit from the widening or narrowing of the spread. Relative Value.
Trend-Following is a strategy that seeks to capitalize on momentum or price trends across global asset classes by taking either long or short positions as a trend is underway. Price trends are created when investors are slow to act on new information or sell prematurely and hold on to losing investments to long. Price trends continue when investors continue to buy and investment that is going up in price or sell an investment that is going down in price.
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index.
Worst Historical Loss is the measure of risk (also known as Maximum Drawdown) that illustrates the largest peak-to-valley decline, based on monthly rates of return, during a given time period. The Worst Historical Loss depicted in this presentation is not the maximum loss that can occur in an individual’s managed account. There is no guarantee that managed futures or any particular investment will meet its intended objective; accordingly, investors could lose a substantial portion, or even all, of their investments.
Equinox Funds Sales Team1.866.276.6010
equinoxfunds.com
The material provided herein has been provided by Equinox Fund Management, LLC and is for informational purposes only. Equinox Fund Management, LLC is the adviser to one or more mutual funds distributed through Northern Lights Distributors, LLC member FINRA/SIPC. Northern Lights Distributors, LLC and Equinox FundManagement, LLC are not affiliated entities.
5124-NLD-02/15/2017 | PRES-2-111627
