Managed Futures Are Having a Moment

Let’s consult the Managed 8-Ball. 

Once the domain of institutions, managed futures have become more accessible to individual investors through ETFs. There may be no time like the present — returns faltered between 2022 and 2025, with the typical fund in the category losing an annualized 2.3% during that period, but managed futures ETFs have had a stronger 2026, with several funds nearing 20% returns year to date. In a market where everything is starting to look like one big AI trade, the strategy can act as a risk mitigator with returns that aren’t correlated with stocks and bonds. 

“I really call it ‘true diversification,’” said Paul Cavazos, CIO of American Beacon Advisors, pointing to the lack of diversification in 60/40 portfolios. With managed futures, “their correlation to world stocks is 0.08, and so that is really, really strong diversification.” 

Reply Hazy, Try Again

Managed futures typically don’t do well in choppy markets, but they often work during markets with sustained movement, not just downturns, which is why managed futures returns are up alongside stocks. “It gets shoehorned sometimes [as] something that will only work during periods of stress,” said Jerry Prior, CIO of managed futures at Mount Lucas. “We can make money when stocks are up too. That’s what uncorrelated means.” 

Sometimes investors view them as a hedge, but Prior says this isn’t the right way to look at it. “We’re not necessarily on the correct side of a trade at the start of any crisis or any stress in the market,” he said. “It’s not meant to be a hedge that is right on day one, day two, day three. We typically will do better in medium to long-term type moves.” 

Flows for managed futures ETFs have picked up this year: 

• The iMGP DBi Managed Futures Strategy ETF (DBMF), with $5.1 billion under management, brought in $2.8 billion in 2026 and is up roughly 18% year to date, according to Morningstar Direct.
• The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM), with about $600 million under management, has attracted about $377 million this year, and is up nearly 20% in 2026. 
• The Simplify Managed Futures Strategy ETF (CTA) is up just over 10% year to date but has seen about $340 million exit in the last three months. This may be due to shakeups in the managing team. 

Signs Point to Yes. Managed futures are best viewed as a complement to a portfolio, not a wholesale replacement of bonds or other diversifiers, Prior said. “Managed futures is a replacement for some of your bonds,” he said. Bonds “can’t do all the stock diversification by themselves. They need help. We are a large, mature asset class in very liquid markets that can provide that help.”