Frontier

Document Sample
Frontier Powered By Docstoc
					          Managed Futures: An Investment To Consider




                                                       Fall 2009
Carter Financial Management
12222 Merit Dr., Suite 1800
Dallas, TX 75251
(214)363-4200 (214) 363-4369 FAX
www.cascfm.com



                                              CAR#: 0508-87367
                                            SKU#: FRF-PS-002-0609
Principal Risk Factors
THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY UNITS IN THE FRONTIER
FUND OR ANY OTHER SECURITY. THE OFFERING OF UNITS IN THE FRONTIER FUND CAN ONLY BE MADE BY PROSPECTUS WHICH
CONTAINS IMPORTANT INFORMATION REGARDING RISKS ASSOCIATED WITH THE FRONTIER FUND AND SHOULD BE READ
CAREFULLY AND RETAINED BY ANYONE CONSIDERING INVESTMENT IN THE FRONTIER FUND. ANY INVESTMENT IN MANAGED
FUTURES IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK.

There is a substantial risk of loss in managed futures, and there can be no guarantee that any managed futures trading program or any program of
The Frontier Fund will meet its intended objective; accordingly, an investment in managed futures may not be suitable for everyone and an investor
could lose a substantial portion, or all, of his or her investment.

Set forth below is a summary of certain principal risk factors associated with an investment in managed futures. You should consider all risk factors
before investing in managed futures, including (but not limited to):

        –     Futures, forward and options trading is speculative, volatile, and highly leveraged.

        –     Past performance is not indicative of future results.

        –     You could lose a substantial portion, or even all, of your investment.


Please refer to the “Risk Factors” section of the Prospectus for more details.

This material is intended for your personal use only as an educational tool only and may contain proprietary data.

Opinions expressed herein are current opinions as of the date appearing in this material only. Reliable methods were used to obtain information for
this presentation but the authors cannot guarantee the information for accuracy or reliability. In no event should anything contained herein be
construed as an expressed or implied promise, guarantee or implication by The Frontier Fund or its affiliates that any particular objectives will be
met, that they will be profitable, or that they will be able to avoid losses. No level of diversification or non-correlation can ensure profits or guarantee
against losses.




                                                                                                                                       CAR#: 0508-87367
                                         PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                        SKU#: FRF-PS-002-0609     1
An Investor Has Options…




     Stocks                      Cash                     Managed Futures




     Bonds                   Real Estate                      Collectibles




                                                                          CAR#: 0508-87367
              PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS      SKU#: FRF-PS-002-0609   2
Let’s Look at One Option in More Detail




                                                                     CAR#: 0508-87367
            PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS   SKU#: FRF-PS-002-0609   3
Managed Futures are Not a “New” Asset Class



          1848                                1970s                              Today




1848:            Chicago Board of Trade founded April 3, 1848

1970s: Commodity exchanges develop financial futures for hedging
       Institutions increase allocations to managed futures

Today: Managed futures are a massive global industry, in over 100
       markets worldwide, now available to retail investors

Source: Chicago Board of Trade

                                                                                           CAR#: 0508-87367
                                 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS    SKU#: FRF-PS-002-0609   4
Word is Getting Out
 In the last few years, investors around the world, including wealthy individuals, pension
      plans, college and university endowments, foundations, banks and other large institutions,
      have increased their allocations to managed futures, now totaling over $206 Billion
      as of December 2008.

                       Growth Of Managed Futures: Money Under Management ($ Billion)
      $220                                                                                                                                                                                                                      $206
      $200

      $180                                                                                                                                                                                                    $170
      $160

      $140
                                                                                                                                                                                               $118
      $120
      $100

       $80

       $60                                                                                                                                                                          $51
                                                                                                                                                      $36            $38
       $40
                                                                                                                        $25            $24
                                                                                                         $19
       $20                                                                  $6            $11
              $0.3             $0.6           $0.8            $2
         $0
                1980

                        1981

                                1982

                                       1983

                                               1984

                                                      1985

                                                              1986

                                                                     1987

                                                                            1988

                                                                                   1989

                                                                                           1990

                                                                                                  1991

                                                                                                          1992

                                                                                                                 1993

                                                                                                                         1994

                                                                                                                                1995

                                                                                                                                        1996

                                                                                                                                               1997

                                                                                                                                                       1998

                                                                                                                                                              1999

                                                                                                                                                                      2000

                                                                                                                                                                             2001

                                                                                                                                                                                     2002

                                                                                                                                                                                            2003

                                                                                                                                                                                                   2004

                                                                                                                                                                                                           2005

                                                                                                                                                                                                                  2006

                                                                                                                                                                                                                         2007

                                                                                                                                                                                                                                  2008
Source: Barclays Capital U.S. Aggregate Bond Index

                                                                                                                                                                                                            CAR#: 0508-87367
                                                             PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                                                                         SKU#: FRF-PS-002-0609          5
Why are Managed Futures Gaining Ground?

                    Differences                                                                        Similarities

     Source of return                                                                  Potential for Equity-
                                                                                              like returns
     Markets traded
     Profit opportunities
     Managed futures
            have lower volatility,
            historically




There is a substantial risk of loss in managed futures, and there can be no guarantee that any managed futures trading program of
The Frontier Fund will meet its intended objective; accordingly, an investment in managed futures may not be suitable for everyone and an
investor could lose a substantial portion, or all, of his or her investment.

                                                                                                                                              CAR#: 0508-87367
                                              PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                          SKU#: FRF-PS-002-0609   6
Different Sources of Returns

                Stocks                                                        Bonds                                         Managed Futures

                                                                      Rental value                                                 Transfer of
  Raising of capital
                                                                       of money                                                     price risk




There is a substantial risk of loss in managed futures, and there can be no guarantee that any managed futures trading program of
The Frontier Fund will meet its intended objective; accordingly, an investment in managed futures may not be suitable for everyone and an
investor could lose a substantial portion, or all, of his or her investment.

                                                                                                                                              CAR#: 0508-87367
                                              PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                          SKU#: FRF-PS-002-0609   7
Different Markets Traded
Examples:
      Commodities




                    Agriculturals                                      Metals                                        Energy
                     Soybeans                                          Gold                                         Heating Oil
                     Live Cattle                                       Silver                                       Gasoline
                     Corn                                              Copper                                       Crude Oil
                     Cocoa                                             Lead                                         Natural Gas

                    Currencies                                         Equities                                      Interest Rates
      Financials




                     Australian Dollar                                 S&P 500                                      Eurodollar
                     British Pound                                     Russell 2000                                 U.S. T-Bonds
                     Euro                                              Nikkei                                       U.S. T-Notes
                     Japanese Yen                                      CAC 40                                       Australian T-Bonds

This is a representative sampling provided for informational purposes only. Not all markets or strategies are traded by all CTAs. There is
substantial risk of loss in managed futures, and there can be no guarantee that any managed futures trading program or The Frontier Fund will
meet its intended objective; accordingly, an investment in managed futures may not be suitable for everyone and an investor could lose a
substantial portion, or all, of his or her investment.
                                                                                                                                                  CAR#: 0508-87367
                                               PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                             SKU#: FRF-PS-002-0609   8
The Futures Paradox
         Adding Managed Futures                                              0%
         Average Annual Return
         Jan. 1980 – Dec. 2008
                                                                    12    10.57%
                                                                    10
                                                                     8
                                                       Return 6
                          Bonds                                      4
                           20%                                       2
                                                                     0
                                                                     -2
                                                                     -4
              Stocks                                                 -6
               80%                                                   -8
                                                            Risk
                                                                  -10
                                               (Standard Deviation)
                                                                    -12
                                                                    -14    12.50%


Stocks: S&P 500 Total Return Index. Source: PerTrac Financial Solutions.
Bonds: Barclays Capital U.S. Aggregate Bond Index. Source: PerTrac Financial Solutions.
Managed Futures: CASAM CISDM CTA Asset Weighted Index. The Frontier Fund trading advisor programs are a small subset of this index,
and therefore the Fund’s results may be less favorable and deviate substantially from the index results shown above. Source: PerTrac
Financial Solutions. The allocations here are for illustrative purposes only and are not representative of any actual portfolio or
recommendation currently being offered by The Frontier Fund.
                                                                                                                                         CAR#: 0508-87367
                                            PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                       SKU#: FRF-PS-002-0609   9
The Futures Paradox
         Adding Managed Futures                                              0%               5%              10%
         Average Annual Return
         Jan. 1980 – Dec. 2008
                                                                    12    10.57%            10.80%           11.01%
                                                                    10
                                                                     8
                                                       Return 6
                        Bonds                                        4
                         18%
                                                                     2

                                   MFs                               0
                                   10%                               -2
                                                                     -4
              Stocks                                                 -6

                72%                                                  -8
                                                            Risk
                                                                  -10
                                               (Standard Deviation)
                                                                    -12
                                                                                            11.88%           11.32%
                                                                    -14    12.50%


Stocks: S&P 500 Total Return Index. Source: PerTrac Financial Solutions.
Bonds: Barclays Capital U.S. Aggregate Bond Index. Source: PerTrac Financial Solutions.
Managed Futures: CASAM CISDM CTA Asset Weighted Index. The Frontier Fund trading advisor programs are a small subset of this index,
and therefore the Fund’s results may be less favorable and deviate substantially from the index results shown above. Source: PerTrac
Financial Solutions. The allocations here are for illustrative purposes only and are not representative of any actual portfolio or
recommendation currently being offered by The Frontier Fund.
                                                                                                                                         CAR#: 0508-87367
                                            PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                       SKU#: FRF-PS-002-0609   10
Managed Futures: Global Exchanges


                                                                     LIFFE
                                                                    LME LIF                           FOEX
                                                                   LIFF IPE                                          Slovenia
                                                                                        SOF
                                                                                               OMS
                                                                                           DTB
                    TCBT WCE                 CDN              BELFOX                         OTOB
                     MGE                      ONXBOT         MONEP                                                                          BCE        OSK
                     KCBT                                     MEFF                                                                                       TOCOM
                                                            MEFF-F          SOFFEX
                                                                     EURX                                                                   KANEX        TGE
                                       PBOT                        MATIF
      CBOE OCX                                      NYBOT               MIB                                                                        TIFFE
                               FCOM                       NYMEX
      CBOT MIDAM                                     FTSE                                                                                        SHME
                                                          NYFE                                                                              HKFE
     IMM                                             NQLX
             CX                                     COMEX CFFE                                                                        SMX
       CME ME
                                                     NYCE CSCE                                                                      SCE           MME
                                                                                                                                    SIMEX

                                                           BM&F
                                                                                             SAFEX
                                                                                                                                                                SFE
                                                                                                                                                        SYD           NZFOE




This is a representative sampling of selected exchanges that is provided for informational purposes. It is not intended to be exhaustive.
Source: Equinox Fund Management, LLC

                                                                                                                                                      CAR#: 0508-87367
                                                PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                                SKU#: FRF-PS-002-0609   11
 The Efficient Frontier
                                         Managed Futures vs. Conventional Portfolio
                                                              January 1980 – December 2008*
                         12.80%
                                                                                                     100% Managed Futures

                         12.60%
 Annualized Return (%)




                         12.40%


                         12.20%


                         12.00%
                                      25% Managed Futures, 45 % Stocks, 30% Bonds
                         11.80%
                                                       60% Stocks, 40% Bonds
                         11.60%
                              8.00%                  10.00%                    12.00%           14.00%                    16.00%

                                                                           Standard Deviation




* Managed Futures: CASAM CISDM CTA Asset Weighted Index. Source PerTrac Financial Solutions
  Stocks: S&P 500 Total Return Index. Source PerTrac Financial Solutions
  Bonds: Barclays Capital U.S. Aggregate Bond Index. Source: PerTrac Financial Solutions

                                                                                                                     CAR#: 0508-87367
                                                   PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS            SKU#: FRF-PS-002-0609   12
How Much Should You Allocate to Alternative
Investments and Managed Futures?


                                                 How Much Should You Allocate To
                                                Alternatives And Managed Futures?
                                     Some major institutional investors allocate
                                 significant portions of their investment portfolios to
                                          alternative investments, of which
                                        managed futures can be a component.
                                                      Harvard                     Yale                 Stanford
                                                                       IBM                Conrail


The companies referenced herein are not affiliated with, nor are they necessarily clients of, The Frontier Fund and have not commented on or
endorsed any part of this presentation. There is substantial risk of loss in managed futures, and there can be no guarantee that any managed
futures trading program or program of The Frontier Fund will meet its intended objective; accordingly, an investment in managed futures may
not be suitable for everyone and an investor could lose a substantial portion, or all, of his or her investment.
Source: Harvard Annual Report 2003.

                                                                                                                                                 CAR#: 0508-87367
                                              PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                             SKU#: FRF-PS-002-0609   13
What Now? Finding Your Clients’ Personal Risk Threshold

Are they. . .
                  Conservative                   Moderate                   Aggressive




                    Catherine                       Miles                       Andy
Wants:               Steady                      Medium-term                  Long-term
                   appreciation                  appreciation                appreciation

Can’t Sleep:         If portfolio                 If portfolio                If portfolio
                declines moderately              declines a lot            declines a lot for
                                                                          prolonged periods

Will Trade:      Potential up side            Some security for           A lot of security for
                   for security                potential up side           potential up side



                                                                                  CAR#: 0508-87367
                   PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS         SKU#: FRF-PS-002-0609   14
Portfolios of Traditional Investments Only

                                            Conservative                     Moderate                 Aggressive




                                                 Catherine                      Miles                   Andy
  Investment Mix:                               40% Stocks                    60% Stocks               90% Stocks
                                                60% Bonds                     40% Bonds                10% Bonds

  Average Annual
  Return:                                            9.97%                      10.33%                  10.64%


  Worst Year:                                      -13.20%                     -21.63%                  -33.34%


Annual returns are from Jan. 1980 – Dec. 2008.
Stocks: S&P 500 Total Return Index.
Bonds: Barclays Capital U.S. Aggregate Bond Index.
Source: PerTrac Financial Solutions. Portfolio rebalanced quarterly.

                                                                                                          CAR#: 0508-87367
                                               PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS     SKU#: FRF-PS-002-0609   15
Portfolios That Include Managed Futures
                                                                                            Conservative                                               Moderate                                      Aggressive
                                                                                             Catherine                                                  Miles                                          Andy




   OLD Investment Mix:                                                                      40% Stocks                                            60% Stocks                                         90% Stocks
                                                                                            60% Bonds                                             40% Bonds                                          10% Bonds

   OLD Average Annual Return:                                                                      9.97%                                               10.33%                                         10.64%

   OLD Worst Year:                                                                              -13.20%                                               -21.63%                                         -33.34%

   NEW Investment Mix:                                                                      36% Stocks                                            54% Stocks                                         81% Stocks
                                                                                             10% MF                                                10% MF                                              10% MF
                                                                                            54% Bonds                                             36% Bonds                                           9% Bonds

   NEW Average Annual Return:                                                                    10.39%                                                10.75%                                         11.10%

   NEW Worst Year:                                                                              -10.36%                                               -18.13%                                         -29.01%
Annual returns are from Jan. 1980 – Dec. 2008.
Stocks: S&P 500 Total Return Index. Bonds: Barclays Capital U.S. Aggregate Bond Index. Managed Futures: CASAM CISDM CTA Asset Weighted Index.
The Frontier Fund trading advisor programs are a small subset of this index and therefore the Fund’s results may be less favorable and deviate substantially from the index results shown above.
There is a substantial risk of loss in managed futures, and there can be no guarantee that any managed futures trading program or The Frontier Fund will meet its intended objective; accordingly,
an investment in managed futures may not be suitable for everyone and an investor could lose a substantial portion, or all, of his or her investment.
Source: PerTrac Financial Solutions. Portfolio rebalanced quarterly.
                                                                                                                                                                                                        CAR#: 0508-87367
                                                               PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                                                                   SKU#: FRF-PS-002-0609   16
The Frontier Fund
 A family of two Series: All multi-advisor; actively managed
 Two share classes available: Class 1: commission-based
  (2% upfront with trails) and Class 2: wrap-fee accounts

 Daily liquidity and no-cost switching between Series
 Low minimum investment: $1,000 or no minimum – qualified plans
 Active asset allocation and administration: The Bornhoft Group
 Breakpoints: $500,000+ and $1,000,000+
 Transparency: Utilizes separately managed accounts & swaps, no FOF



                                                                           CAR#: 0508-87367
                  PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS   SKU#: FRF-PS-002-0609   17
The Frontier Fund at Raymond James

            The Frontier Fund “Family of Funds” at Raymond James



     Multi-Advisor • Actively Managed • Class 1 & Class 2 Options Available



                            Frontier Diversified Series


                              Frontier Masters Series




                                                                           CAR#: 0508-87367
                 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS    SKU#: FRF-PS-002-0609   18
The Frontier Fund – Sector Diversification
As of March 2009

                               Frontier Masters Series                                                                      Frontier Diversified Series


                                                          11%
                                      16%                                                                                                 11%        9%

                                                                       11%                                                                                9%

                            15%                                                                                             22%

                                                                        18%                                                                               26%


                                           29%                                                                                          23%

                        Energy                 Agriculturals          Interest Rates
                        Currencies             Stock Indices          Metals



The sector allocations presented here are current as of March 2009. Percentages are approximate and subject to change. There is no
guarantee that managed futures or The Frontier Fund will meet its intended objective; accordingly, investors could lose a substantial
portion, or even all, of their investment. This information does not constitute an offer to sell or a solicitation of an offer to buy units in The
Frontier Fund and is qualified in its entirety by the Prospectus.

                                                                                                                                                            CAR#: 0508-87367
                                                   PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                                   SKU#: FRF-PS-002-0609   19
Descriptions of Indices & Definitions of Terms
CASAM CISDM CTA Asset Weighted Index: The CASAM CISDM CTA Asset Weighted Index reflects the dollar-weighted performance of Commodity
Trading Advisors (CTAs) reporting to the CASAM CISDM Database. CTAs trade a wide variety of OTC and exchange-traded forward, futures and options
markets (e.g., physicals, currency, financial), based on a wide variety of trading models. In order to be included in the Asset Weighted Index universe, a
CTA must have at least $500,000 under management and at least a 12-month track record. The index goes back historically to January 1980. Source:
www.casamhedge.com.

S&P 500 Total Return Index: Widely regarded as the best single gauge of the U.S. equities market, this world-renowned index includes 500 leading
companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large cap segment of the market, with approximately 75%
coverage of U.S. equities, it is also an ideal proxy for the total market. Total return provides investors with a price-plus-gross cash dividend return. Gross
cash dividends are applied on the ex-date of the dividend. Source: www.standardandpoors.com.

Barclays Capital U.S. Aggregate Bond Index: The U.S. Aggregate 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. The U.S. Aggregate Index is a component of the U.S. Universal Index in its entirety. The index was
created in 1986, with index history backfilled to January 1, 1976. Source: www.barclayhedge.com.

Standard Deviation: Measures the degree of variation of monthly returns around the mean (average) return. The higher the volatility of the investment
returns, the higher the standard deviation will be.

Annualized Rate of Return (AROR):




                                                                                                                                    CAR#: 0508-87367
                                        PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS                                      SKU#: FRF-PS-002-0609    20
                                                         CAR#: 0508-87367
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS   SKU#: FRF-PS-002-0609   21

				
DOCUMENT INFO