Eyeing Alternatives With A Managed Futures ETF | ETF Trends

By Todd Shriber via Iris.xyz

One of the many asset classes exchange traded funds (ETFs) have made more accessible to a broader swath of investors is managed futures.

The managed futures industry is more than three decades old and is typically comprised of money managers known as commodity trading advisors (CTAs). Managed futures strategies and ETFs are usually comprised of futures on asset classes including bonds, commodities, currencies and commodities. For its part, the JPMorgan Managed Futures Strategy ETF (JPMF) includes a variety of asset classes including equities, fixed income, currency and commodities based on relative attractiveness.

Managed futures are considered alternative investments and one of the key components of alternatives is reduced correlations to traditional asset classes, such as bonds and equities.

“Managed futures funds have proven to be uncorrelated to stocks and bonds, as well as other alternative asset classes, over time, thus offering true diversification to a portfolio,” according to 361 Capital. “In fact, of all the alternative mutual fund categories, the managed futures category has provided the greatest correlation benefit over the last five years (a period chosen to correspond with the growth in alternative mutual funds).”

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