To diversify a portfolio, more and more investors are considering managed futures funds. The amount of capital that has been invested in these programs has climbed to over $130 billion over the past 30 years. As investors continue to invest in managed futures, others have become curious for its astronomical growth.

The stock market has recently experienced a 3-year decline for the first time in 60 years. Along with this 3-year decline, the stock market has not been able to achieve its highs from 1999. In the current poor economic conditions, many major corporations failed spiking a level of uncertainty among equity investors. This uncertainty has the potential to turn the equity markets volatile.

Managed futures funds are a popular investment choice in poor economic climates because the futures markets are uncorrelated with equity markets. Trading professionals believe because the futures markets are uncorrelated to equity markets, these funds are an effective investment diversification strategy. Numerous studies show portfolios diversified with futures funds may have more stable returns over a period of time.

Managed futures funds are optimal for the investor not looking to actively trade futures himself; but would like to participate in the futures markets. These funds are similar to investing in a mutual fund. A Commodity Trading Advisor (CTA) manages the trading and risk within the account on behalf of the investor.

If you are interested in managed futures funds, search for a CTA who has a trading style that matches your tolerance for risk. An attractive CTA will have multiple funds with different levels of risk tolerance to match investor needs. Then, of course, always review the fund's prospectus and historical returns.

THERE IS A SUBSTANTIAL RISK OF LOSS INVOLVED IN FUTURES TRADING AND IS NOT SUITABLE FOR ALL INVESTORS.