Tired of Tracking the S&P 500? These 3 Managed Futures ETFs Offer a Different Path

"Managed futures ETFs run systematic strategies across dozens of futures markets, going long or short based on price trends. The strategy can profit when the dollar strengthens, when crude oil collapses, or when the front end of the yield curve reprices. In a year of elevated volatility across equities, bonds, and currencies, trend-following managed futures strategies have delivered consistent, non-correlated returns."

"The distinction showed up again this spring. The VIX pushed close to 31 in late March before sliding back toward 17 by early May, and the 10‑year Treasury yield swung from roughly 4% to about 4.5% over the same stretch. Equities, rates, and currencies all moved with real force, which is exactly the kind of backdrop that trend‑following systems are designed to navigate."

"Year-to-date through May 6, CTA is up about 10%, KMLM about 11%, and DBMF about 8%, against SPY at roughly 7%. Managed futures earned most of those returns while equities were under pressure in March, then held up as the S&P rebounded, delivering the non-correlated return profile these funds are designed to provide."

"Managed futures funds spent most of the past decade as a footnote in portfolio construction conversations. They came back into the spotlight in 2022 when stocks and bonds fell together, and the conversation never really faded. The three funds covered here, the Simplify Managed Futures Strategy ETF ( NYSEARCA:CTA), the iMGP DBi Managed Futures Strategy ETF ( NYSEARCA:DBMF), and the KraneShares Mount Lucas Managed Futures Index Strategy ETF ( NYSEARCA:KMLM), each take a different route to the same destination: returns that move on their own schedule rather than tracking the S&P 500."

Managed futures ETFs apply systematic strategies across many futures markets, taking long or short positions based on price trends. These strategies can benefit from moves in the dollar, crude oil, and changes in the yield curve. In periods when equities, bonds, and currencies move sharply together, trend-following systems aim to navigate those conditions and produce returns that are less correlated with traditional stock indexes. During 2022’s selloff when stocks and bonds fell together, managed futures regained attention. In the spring volatility window, the VIX and 10-year Treasury yields swung meaningfully, while managed futures delivered year-to-date gains that outpaced SPY and maintained a non-correlated profile.

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