Managed futures gain traction as investors reassess bond allocations

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Managed futures gain traction

Highlights

Andrew Beer of DBi asserts bonds have delivered poor returns over the past decade, advocating for managed futures as a more tactical diversifier.
Managed futures ETFs such as the iMGP DBi Managed Futures Strategy ETF (DBMF) allow long and short positions across asset classes, with DBMF up almost 19% year-to-date according to FactSet.
Nate Geraci of NovaDius Wealth Management contends alternatives like managed futures should complement, not replace, bond allocations for long-term diversification.

Portfolio strategy debate widens

As reported by CNBC, DBi co-founder and managing member Andrew Beer says investors should rethink heavy bond allocations and consider managed futures exposure as an alternative way to diversify portfolios.

Beer argues bonds have been "dead money" for the decade and says managed futures offer a tactical approach that can respond more effectively when markets turn volatile. He says the strategy, once largely confined to hedge funds, can hedge equity exposure better than bonds because it is designed to move across asset classes and react early to turbulent events.

Managed futures exchange-traded funds can take both long and short positions in global markets, giving them tools that traditional fixed income allocations do not have. Beer says investors need assets with low correlation to both stocks and bonds, particularly in crises, and he describes managed futures as one of the strongest hedge fund approaches for that role.

He helps manage the iMGP DBi Managed Futures Strategy ETF, trading under ticker DBMF. According to DBi's website, the fund seeks to replicate the performance of leading managed futures hedge funds in a low-cost, liquid ETF structure, and FactSet data show it is up almost 19% so far this year as of Thursday's close.

Alternatives complement, not replace, bonds

Nate Geraci, president of NovaDius Wealth Management, takes a more balanced view and says bonds still have a place in diversified portfolios even as fixed income becomes harder to position. Speaking in the same interview, he says alternative strategies belong alongside stocks and bonds rather than serving as a full substitute for the bond allocation.

Geraci says investors should understand how managed futures ETFs interact with the rest of a portfolio because periods of strong performance in volatile markets can be followed by stretches of weaker returns. In his view, the case for alternatives rests on long-term diversification rather than abandoning fixed income altogether.

The discussion reflects broader pressure on the traditional 60/40 portfolio model, which allocates 60% to stocks and 40% to bonds. Beer says there is an existential crisis in strategic asset allocation, while Geraci argues the answer is portfolio balance rather than giving up on bonds entirely.

Our earlier article on the Philippine Social Security System’s investment strategy explained how the pension fund defended its portfolio approach by separating unrealized “paper” losses from realized gains and dividend income accumulated over decades. It also highlighted how SSS leans on diversification and income-producing holdings to manage volatility and meet return targets, framing long-term portfolio construction as a risk-control tool rather than a short-term performance contest.

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