Diversification

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RL CAPITAL

The development of regulated futures exchanges across the globe allows RL Capital to diversify its portfolios by sector, geographic market, as well as product.   By broadly diversifying across global markets, RL Capital is positioned to potentially profit from price changes in stock, bond, currency and money markets, as well as from diverse commodity markets having virtually no correlation to traditional asset classes.

Portfolio selection is of vital importance within each system designed by RL Capital with a great deal of research and testing put into finding the optimal balance of non-correlated  markets and sectors.  Currently the RL Capital Managed Account program contains over 30 exchange traded futures markets across 8 sectors.  

At this time, RL Capital’s portfolio consists of the following markets/sectors. 

MANAGED FUTURES

Together with the diversification benefits of the individual portfolio, managed futures has historically provided portfolio diversification.. The main benefit of adding managed futures to a traditional portfolio of stocks and bonds is the potential to decrease portfolio volatility. Risk reduction is possible because managed futures can trade across a wide range of global markets that have virtually no long-term correlation to most traditional asset classes. Moreover, managed futures investments generally perform well during adverse economic or market conditions for stocks and bonds, thereby providing excellent downside protection in most portfolios.

1) Managed futures: CASAM CISDM CTA Equal Weighted;
2) Stocks: MSCI World;
3) Bonds: JP Morgan Government Bond Global;
*Courtesy CME Group: Managed Futures: Portfolio Diversification Opportunities.

The graphic above illustrates that while managed futures can decrease portfolio risk, they can also simultaneously enhance overall portfolio performance.  The data illustrate that adding managed futures to a traditional portfolio improves overall investment quality while also potentially reducing risk.   Even portfolios with a 20% allocation to Managed Futures experience reduced volatility as well as higher returns over the long-run. 

Trading futures and options involves substantial risk of loss no matter who is managing your money and is not suitable for all investors. 

Past performance is not indicative of future results.