As stocks, bonds fall, a trade that boomed in 2022 may be winner again
Managed futures strategies are gaining renewed interest as investors both seek new sources of returns from the market. stocks And bonds They are under pressure due to the US-Iran war and the risk of 1970s-style stagflation.
These strategies, often run by commodity trading advisors, use systematic patterns to trade future contracts across different asset classes. Rather than focusing on short-term market movements across traditional asset classes, they aim to capture broader trends that emerge over months. Its ability to adapt to changing market conditions and its performance in 2022 has made managed futures funds increasingly important in 2026.
While the S&P 500 Index will decline around 18% in 2022, Bloomberg US Aggregate Bond Index was down about 13%, while managed futures strategies were up 20%.
““This is meaningful outperformance in an environment where stocks and bonds are under pressure,” NovaDius president Nate Geraci said on CNBC’s “ETF Edge” program earlier this week.
Andrew Beer is managing member of DBi, which manages the iMGP DBi Managed Futures Strategy ETF, the largest managed futures ETF.DBMF), said in “ETF Edge” that uncertainty around inflation and interest rates and the volatile geopolitical environment are a good match for a managed futures approach that can take long or short positions and has the flexibility to respond to different trends in the markets.
Performance of the iMGP DBi Managed Futures Strategy ETF over the past five years.
Managed futures ETFs remain a relatively small category, collectively holding about $6.5 billion in assets, according to ETFAction.com. Within this space, the iMGP DBi Managed Futures Strategy ETF has attracted nearly $1 billion in flows this year.
Using the managed futures approach in ETFs allows more investors to access a strategy historically associated with the hedge fund world in a more liquid and transparent structure.
“We’re leveraging the work of the largest hedge funds and trying to be more efficient and follow what they’re doing,” Beer said. “We evolve not from Monday to Thursday, but with 3, 6, 9, 12 month changes,” he said.
“Certainly, [ETF] The industry will also launch additional managed futures products along with other hedge fund strategies, Geraci said on the podcast episode of “ETF Edge.”
Geraci said a clear sign that this approach will gain more traction from retail investors is that three of the largest asset managers are entering the space with their own branded managed futures ETFs: Black Rock, invesco And Loyalty Investments.
“They all entered the market last year, and that’s a sign of real investor demand moving forward,” Geraci said. “There is interest, especially given this market environment,” he added.
Still, managed future ETFs remain more complex than regular stock and bond investments, and investors need to understand that their performance can outperform but also lag stocks and bonds during periods of market stress and volatility.
“I think these are clearly more complex than other types of ETFs on the market,” Geraci said. “Investors and advisors need to have a solid understanding of how these work,” he said. Perhaps most importantly, “Investors need to be able to stick with managed futures through inevitable periods of underperformance,” he added.
“They can work really well when you need them, but you have to let them work through all market cycles,” Geraci said.
Beer said investors might consider allocating between 3% and 5% of an overall market portfolio diversification approach to this type of strategy, “just sitting next to solid assets or infrastructure.”
“I think we all have the same goal: We want our investors to be able to grow their wealth but also be able to sleep at night,” he said.
