FAQ

 

What is an alternative investment?

An alternative investment is a financial product other than stocks, mutual funds and exchange-traded funds (ETF’s). Managed futures products (also referred to as commodities or economic derivatives) are a widely traded type of alternative investment. Many alternative investments, including managed futures, offer the use of a high degree of leverage, which can produce either significant gains or losses.

 

What are managed futures products?

Managed futures products include futures, fowards and option contracts on stock indices, precious metals, interest rates, foreign currencies and agricultural products.

 

Who regulates the managed futures markets?

The managed futures markets operate under the regulations of the Commodity Futures Trading Commission (CFTC). CFTC regulations are enforced by the exchanges (CBOT, MCE, NYMEX and others) on which these products are traded and by the National Futures Associations (NFA), which is the federally authorized self-regulatory organization that administers the regulations of the CFTC for member firms.

 

What is a Commodity Trading Advisor?

A Commodity Trading Advisor (CTA) is a firm that has met the requirements of the Commodity Futures Trading Commission (CFTC) for trading managed futures products on behalf of clients in individually managed accounts.

CTA firms are required to register with the CFTC and become members of the NFA. CTA firms are subject to periodic audits of their practices, procedures and published performance results by the NFA.

 

What is a Commodity Pool Operator?

A Commodity Pool Operator (CPO) is a firm that has met the requirements of the Commodity Futures Trading Commission (CFTC) for trading managed futures products on behalf of clients in a pooled account.

CPO firms are required to register with the CFTC and become members of the NFA. CPO firms are subject to periodic audits of their practices, procedures and published performance results by the NFA.

 

What is an Investment Adviser?

An investment adviser is a firm that has met the requirements of and is registered with either its home state or the Securities Exchange Commission (SEC) to manage investments on behalf of the firm’s clients.

 

Where can I find the registration status and disciplinary history of a CTA, CPO or Investment Adviser Firm?

The registration status and disciplinary history of managed futures firms may be reviewed by clicking on the following link: http://www.nfa.futures.org/basicnet/.

The registration status and disciplinary history of investment adviser firms may be reviewed by clicking on the following link: http://www.nasd.com/InvestorInformation/InvestorProtection/
ChecktheBackgroundofYourInvestmentProfessional/index.htm.

 

What benefits do individually managed accounts offer over pooled investments?

Individually managed accounts offer certain advantages over pooled investments. Each client’s funds are segregated in their own account, which is held in their own name. A CTA is legally prohibited from having custody of client funds, which are deposited with and held by the Futures Commission Merchant (FCM) through which clients’ futures trades are executed. Generally, individually managed accounts have fewer restrictions on when funds can be deposited into or withdrawn from an account.

 

What benefits do pooled investments offer over individually managed accounts?

Pooled investments offer certain advantages over individually managed accounts. When all investors’ funds are pooled together and traded collectively, the pool’s exposure to the risks of leverage are lessened to some degree, i.e., the pool may be better able to withstand an adverse market move than each of the pool’s participants would if their funds were in individually managed accounts. Also, a uniform pro-rata rate of return is easier to achieve on behalf of pool participants than may be possible for clients invested in individually managed accounts.

 

Are your trading programs suitable for all investors?

No – definitely not! Alternative investment programs, including managed futures programs such as ours, are speculative in nature; and they are not appropriate for all investors. Accordingly, Ascendant will review the financial condition and investment goals of each potential investor to determine whether our investment programs may be suitable for this particular investor.