Managed futures strategies are gaining renewed attention as investors seek new sources of return in the market at a time when both are true Shares And Bonds are under pressure due to the war between the USA and Iran and the risk of stagflation like in the 1970s.
These strategies, typically run by commodity trading advisors, use systematic models to trade future contracts across different asset classes. Rather than focusing on short-term market movements in traditional asset classes, they aim 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 by around 18% and the Bloomberg US Aggregate Bond Index fell by about 13%, managed futures strategies rose by 20%.
““This is significant outperformance in an environment where stocks and bonds are under pressure,” Nate Geraci, president of NovaDius, said on CNBC’s “ETF Edge” earlier this week.
Andrew Beer, managing member at DBi, which manages the largest managed futures ETF, the iMGP DBi Managed Futures Strategy ETF (DBMF), said on “ETF Edge” that uncertainty around inflation and interest rates, as well as the volatile geopolitical backdrop, fit well with the managed futures approach, which can take long or short positions and has the flexibility to respond to different trends in the markets.
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Performance of the iMGP DBi Managed Futures Strategy ETF over the last five years.
According to ETFAction.com, managed futures ETFs remain a relatively small category, collectively holding around $6.5 billion in assets. In this space, the iMGP DBi Managed Futures Strategy ETF has attracted about $1 billion in inflows this year.
Using the managed futures approach to ETFs allows more investors to access a strategy that has historically been associated with the world of hedge funds, but in a more liquid and transparent structure.
“We’re leveraging the work of the largest hedge funds and trying to be more efficient and pick up on what they’re doing,” Beer said. “We thrive on change over a period of 3, 6, 9, 12 months, not Monday to Thursday,” he said.
“Certainly, that [ETF] “The industry will bring more managed futures products to market alongside other hedge fund strategies,” Geraci said during the “ETF Edge” podcast portion.
Geraci said a clear signal that this approach is likely to attract greater interest from retail investors is the entry of three of the largest asset managers in the space with their own managed futures ETFs: BlackRock, I invest And Fidelity Investments.
“They all came to market last year and that is a sign that there is real investor demand going forward,” Geraci said. “The interest is there, particularly given this market environment,” he added.
Still, managed futures ETFs remain more complex than regular stock and bond investments, and investors must understand that while their performance can outperform stocks and bonds during times of market stress and volatility, they can also underperform.
“I think these are significantly more complex than other types of ETFs on the market,” Geraci said. “Investors and advisors need to understand exactly how these work,” he said. Perhaps most importantly, he added, “Investors must be able to hold on to managed futures even during inevitable periods of poor performance.”
“They can work really well when you need them, but you have to be able to make them work throughout the market cycle,” Geraci said.
Beer said investors could envision an allocation to this type of strategy that would be in the 3% to 5% range of a diversification approach to the overall market portfolio and “simply sit alongside hard assets or infrastructure.”
“I think we all have the same goal: We want our investors to be able to grow their wealth but sleep at night,” he said.
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