Managed future strategies are gaining renewed attention as investors look for new sources of returns from the market at a time when both stocks and bonds are under pressure as a result of the U.S.-Iran war and the risk of 1970s-style stagflation.
These strategies, which are typically run by commodity trading advisors, use systematic models to trade future contracts across different asset classes. Rather than focus on short-term market moves 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 back in 2022, has made managed futures funds increasingly relevant in 2026.
In 2022, when the S&P 500 Index fell around 18% and the Bloomberg U.S. Aggregate Bond Index was down about 13%, managed future strategies were up 20%.
"That's meaningful outperformance in an environment when stocks and bonds are under pressure," Nate Geraci, NovaDius president, 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 the uncertainty around inflation and interest rates, and the volatile geopolitical backdrop, are a good match for the managed futures approach, which can take long or short positions and have the flexibility to respond to different trends across the markets.
Managed futures ETFs remain a relatively small category, collectively holding around $6.5 billion in assets, according to ETFAction.com. Within that space, the iMGP DBi Managed Futures Strategy ETF has attracted about $1 billion in flows this year.
The use of the managed futures approach with ETFs allows more investors to access a strategy that been associated with the world of hedge funds historically, but in a more liquid and transparent structure.
"We're leveraging the work of largest hedge funds, and trying to be more efficient, pick up what they are doing," Beer said. "We thrive with changes over 3, 6, 9, 12 months, not Monday to Thursday," he said.
"Certainly, the [ETF] industry is going to be launching additional managed futures products along with other hedge funds strategies," Geraci said during the podcast portion of "ETF Edge."
Geraci said one clear signal that this approach is likely to see more interest from retail investors is three of the biggest asset managers getting into the space with their own branded managed futures ETFs: BlackRock, Invesco and Fidelity Investments.
"They all entered the market in the past year and that is a sign of real investor demand going forward," Geraci said. "The interest is there, especially given the backdrop of this market environment," he added.
Still, managed future ETFs remain more complex than regular stock and bond investments, and investors need to understand that while their performance can beat stocks and bonds during periods of market stress and volatility, they can also lag.
"I do think these are clearly more complex than other types of ETFs on the market," Geraci said. "Investors and advisors need to have a firm understanding of how these work," he said. Maybe most important, he added, "Investors have to be able to stick with managed futures through inevitable periods of underperformance."
"They can work really well when you need them, but you have to be able to let them work over full market cycles," Geraci said.
Beer said investors can think of an allocation to this type of strategy being in the range of 3% to 5% of an overall market portfolio diversification approach, "just sitting there alongside hard assets or infrastructure."
"I think we all have the same goal: we want our investors to be able to grow their assets, but sleep at night," he said.
Facts Only
Managed futures strategies are gaining renewed attention from investors.
These strategies are typically run by commodity trading advisors.
They use systematic models to trade futures contracts across different asset classes.
In 2022, managed futures strategies were up 20% while the S&P 500 fell 18% and the Bloomberg U.S. Aggregate Bond Index was down 13%.
Nate Geraci, president of NovaDius, commented on the outperformance of managed futures in a volatile market environment.
Andrew Beer, managing member at DBi, manages the largest managed futures ETF, the iMGP DBi Managed Futures Strategy ETF (DBMF).
Managed futures ETFs collectively hold around $6.5 billion in assets.
The iMGP DBi Managed Futures Strategy ETF has attracted about $1 billion in flows this year.
BlackRock, Invesco, and Fidelity Investments have entered the managed futures ETF space in the past year.
Managed futures ETFs are more complex than regular stock and bond investments.
Investors need to understand the mechanics of managed futures and be prepared for periods of underperformance.
Experts suggest an allocation of 3% to 5% of a portfolio to managed futures for diversification.
Executive Summary
Full Take
The narrative around managed futures strategies presents a compelling case for their role in diversification, particularly in volatile markets. The strongest version of this argument highlights their historical outperformance during market stress, adaptability to geopolitical and economic uncertainty, and the democratization of access through ETFs. The entry of major asset managers like BlackRock and Fidelity lends credibility, suggesting institutional validation of the strategy.
However, the pattern scan reveals potential elements of **ARC-0024 Ambiguity** and **ARC-0043 Motte-and-Bailey**. The emphasis on past performance (2022) as a predictor of future success may oversimplify the complexity of these strategies, which can lag in certain market conditions. The framing of managed futures as a "must-have" diversification tool could be seen as a form of **ARC-0012 Authority Games**, leveraging the credibility of large asset managers to bolster the narrative. Additionally, the cautionary notes about complexity and underperformance are buried beneath the optimistic tone, which may downplay risks.
The root cause of this narrative is the search for yield and stability in an uncertain economic environment, echoing historical patterns where alternative investments gain traction during market downturns. The implications for human agency are mixed: while managed futures offer potential benefits, their complexity and volatility may not suit all investors, particularly those without the resources to weather periods of underperformance. The second-order consequences include the potential for retail investors to over-allocate to these strategies without fully understanding their mechanics, leading to unintended financial outcomes.
Bridge questions to consider: How might the performance of managed futures strategies differ in a prolonged low-volatility market? What are the specific risks and costs associated with these strategies that investors should weigh against their potential benefits? How does the entry of major asset managers into this space influence the broader market dynamics and investor behavior?
Counterstrike scan: If this narrative were part of a coordinated influence campaign, the playbook would involve emphasizing past performance, leveraging institutional credibility, and downplaying risks to drive investor interest. However, the actual content does not fully align with this pattern, as it includes cautionary notes and acknowledges the complexity of these strategies. The presence of balanced perspectives suggests a more nuanced presentation rather than a manipulative push.
Sentinel — Human
Based on stylometric and coherence indicators, this text appears to be written by a human journalist rather than a synthetic entity. The content discusses the increasing relevance of managed futures funds in a volatile market, citing performance data and expert opinions from financial analysts.