I know what a hedge fund and what a proprietary trading firm are, but I was wondering what differentiates these from a Managed Futures Fund. Obviously Managed Futures fund trades futures, but why can't a hedge fund that only does futures be called a Managed Futures Fund(or is it). Or why a proprietary trading firm that only trades futures, be called a Managed Futures Fund. Thanks.
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Dude, you're comparing apples and oranges on a couple different levels. Hedge funds and prop firms invest capital for their investors (if we're thinking about prop shops, the principals/partners are the investors). Hedge funds frequently offer their investors the opportunity to buy into different funds they are managing - these can be product-specific, strategy-specific, thematic, whatever. It's common for an investor to have their capital in Fund A that is managed by Hedge Fund X, similar to how many investors buy shares of a mutual fund run by asset managers. Futures are products, so a managed futures fund is an investment fund that primarily holds futures and which is managed by a hedge fund or asset manager.
As I said before, I know what hedge fund and prop firm are and what differentiates them.
But I believe, your last sentence answers my question. What is the difference between managed futures and hedge fund, and difference between managed futures and proprietary firm. My thought was one is strictly futures.
Based on your response managed futures is more specific as in trading sector, while.... hedge fund/proprietary is the investor of capital. Thank.
Managed futures are usually traded within a CTA firm, but the conceptual difference between a CTA and a HF is basically zero. That said, there are some licensing differences.
CTAs have a much greater tendency to be highly technical/quantitative in their trading than HFs.
Thanks. Exactly what I was looking for.
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