Managed forex funds are managed forex accounts which are managed by professional forex money managers who utilize a varied range of trading policies, and who, if they are doing their job accurately will employ firm money management principles to control risk. Managed forex funds are now an important part of all sophisticated investors. However this rise is not overall unexpected.
Around 5 years ago, investors were tired of losing their investment on the stock market, and looking for investments which would achieve well in good economic times and bad economic times. Several people thought that investing in real estate was the answer, and invested greatly in buying leasing apartments, and second and third residences. But when the credit disaster happened, several people lost everything.
But those clever enough to invest in forex managed funds stayed away from all of this. Whilst the stock markets gone down, the housing market collapsed, and millions of people were losing their jobs, the forex investments were performing very firmly. This is because there is small or no connection between the forex market and the stock market. In other words, if the stock market collapses, the currency market can still go up. Portfolio theory says that the key to improving investment profits over the long term is to expand your portfolio as much as possible. While the experts may oppose on the exact way to do this, all have the same opinion that a balanced and wide portfolio, containing investments in many different asset classes, is solution to obtaining the best returns. The most important matter is to evade managed forex funds run by dishonest fund managers. Unluckily, the beginning of the internet has meant that managers can conceal behind a website, and rely on the mystery that the internet provides. Therefore, it is necessary that the potential investor does his investigation before investing. This contains carrying out an investigation on the money manager, seeing presentation statements, and examining where the manager is located, to make certain that he is real, and not a fraud.
Performance depends on numerous things, such as the investment policy, and the level of power being used. Most currency funds will have a target return of some form, but this will depend on the individual policy of the fund.
There are various managed forex funds that take little or no risk, and return lower sums, as low as 10% pa. This is a very low return, but the advantage is that your risk is also very low. Other more risky policies could give you 60% or more, but need to admit that there is a danger of losing your investment as well. So it is fundamental to find a managed forex fund which suits your eagerness for risk. The first, and surely one of the most vital factors which determine the rate of return, is what level of power the manager is using.