Managed futures strategies are gaining renewed attention as investors look for new sources of market returns in times like these shares And bond Are under pressure as a result of the US-Iran war and the risk of 1970s-style stagflation.
These strategies, typically run by commodity trading advisors, use systematic models to trade futures contracts in different asset classes. Rather than focusing on short-term market moves in traditional asset classes, their goal is to capture broader trends that unfold over months. The ability to adapt to changing market conditions and their performance in 2022 have made managed futures funds increasingly relevant in 2026.
In 2022, when the S&P 500 index fell nearly 18% and Bloomberg US Aggregate Bond Index was down about 13%, managed futures strategies were up 20%.
““This is a meaningful outperformance in an environment when stocks and bonds are under pressure,” Nate Geraci, president of Novadius, said on CNBC’s “ETF Edge” earlier this week.
Andrew Beer, Managing Member of DBI, which manages the largest managed futures ETF, the IMGP DBI Managed Futures Strategy ETF (dbmf), said on “ETF Edge” that the uncertainty around inflation and interest rates, and the volatile geopolitical backdrop, is a good match for a managed futures approach, which can take long or short positions and have the flexibility to react to different trends in the markets.
Performance of the IMGP DBI Managed Futures Strategy ETF over the last five years.
Managed futures ETFs remain a relatively small category, with collectively about $6.5 billion in assets, according to ETFAction.com. In that sector, the IMGP DBI Managed Futures Strategy ETF has attracted nearly $1 billion of inflows this year.
Using a managed futures approach with ETFs allows more investors to access a strategy that has historically been associated with the hedge fund world, but in a more liquid and transparent structure.
“We’re taking advantage of what the biggest hedge funds do, and trying to make what they’re doing more efficient,” Beer said. “We move forward with change not from Monday to Thursday, but over 3, 6, 9, 12 months,” he said.
“Certainly, the (ETF) industry is going to launch additional managed futures products with other hedge fund strategies,” Geraci said during the podcast portion of “ETF Edge.”
Geraci said in a clear sign that this approach is likely to see greater interest from retail investors, the three largest asset managers are wading into the space with their own branded managed futures ETFs: black Rock, invesco And fidelity investment.
“All of these entered the market last year and this is a sign of real investor demand going forward,” Geraci said. “There remains interest, especially given the backdrop of this market environment,” he said.
Still, managed futures ETFs remain more complex than regular stock and bond investments, and investors need to understand that although their performance can beat stocks and bonds during periods of market stress and volatility, they can also lag.
“I think these are clearly more complex than other types of ETFs that are on the market,” Geraci said. “Investors and advisors need to have a solid understanding of how these work,” he said. Perhaps most important, he said, “investors need to be able to stick with managed futures during inevitable periods of underperformance.”
“They can work really well when you need them to, but you have to be able to let them work across full market cycles,” Geraci said.
Bear said investors can think about an allocation to this type of strategy in the range of 3% to 5% of an overall market portfolio diversification approach, “just sitting there with hard assets or infrastructure.”
“I think we all have the same goal: We want our investors to be able to grow their wealth, but not sleep at night,” he said.
