The managed futures strategy has outperformed the U.S. equities market in the recent correction. FUTS dipped 1.1% year-to-date while the S&P 500 index fell 5.4%.
Along with trading on the BATS exchange, FUT show some variations to the older FUTS. FUT is registered under the Investment Company Act of 1940, so investors won’t have to fill out a K-1 tax form. In contrast, the older FUTS is regulated by the Securities Act of 1933 and generates a K-1 form.
FUT is also actively managed and will seek positive returns that are not directly correlated to the equity or fixed income markets. The active ETF will use the S&P Strategic Futures Index as a performance benchmark, the same underlying index that FUTS follows.
As of February 17, FUT held long positions in lean hogs, gold, the Eurozone euro, Japanese yen, 10-year Treasuries and long-term Treasuries, along with short positions in chicago wheat, corn, soybeans, coffee, sugar, cocoa, cotton, heating oil, unleaded gasoline, WTI crude oil, natural gas, copper, silver, Australian dollar, British pound and Canadian dollar.
FUT comes with a 0.75% expense ratio, similar to FUTS’ fund fee.
Max Chen contributed to this article.