Looking to get into the world of managed futures ETFs? Advisors may well be intrigued by a strategy that combines can take long and short positions across asset classes in such a volatile market. As with any strategy, the cost of managed futures ETFs is a key factor, and with the ETF Database, investors can quickly compare managed futures ETF fees to a managed futures fund like the AQR Managed Futures Strategy Fund (AQMIX).
As a mutual fund, AQMIX operates differently from ETFs, without the same transparency and daily maneuverability expected in the ETF wrapper. The fund charges a 105 basis point (bps) management fee and is a good example of a managed futures strategy in the mutual fund wrapper.
Using VettaFi’s ETF Database investors can quickly screen through all sorts of ETF data, including the cost of managed futures ETFs. Looking at the strategies, all of the managed futures ETFs listed in the database charge fees that are moderately lower than the 105 bps charge attached to AQMIX, with the gap between the cheapest and most expensive fee ETFs set at 31 bps overall.
Charging the lowest fee is the WisdomTree Managed Futures Strategy Fund (WTMF), asking for 65 bps for its approach to tracking the WisdomTree Managed Futures Index. Next up is the Simplify Managed Futures Strategy ETF (CTA) which asks for 75 bps to seek absolute returns with low correlation to equities, which could be appealing given how much pressure equities are facing from the Fed and inflation.
Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities.
See more: “Andrew Beer: This Is the Time to Buy Managed Futures”
Coming in with the highest fees is the duo of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) which charges 92 bps and the First Trust Managed Futures Strategy Fund (FMF) which asks for a 96 bps charge.
KMLM actively invests to broadly track an index of long and short managed futures, allocating to commodity, currency, and global fixed income futures relative to historical volatility. FMF meanwhile also actively invests, with futures used 50% in commodities, and 25% each in currency and equity indexes.
The cost of managed futures ETFs is an important consideration when taking a look at the benefits they can provide, but with all the advantages of the ETF wrapper, they can be a powerful tool compared to strategies mainly or entirely available in a mutual fund. As such, keep an eye out for what managed futures ETFs can deliver for their lower fees in the weeks and months ahead.
For more news, information, and analysis, visit the Managed Futures Channel.