Most Americans Predict Volatility in 2023: Hedge With DBMF | ETF Trends

More than half of Americans are anticipating a major recession, and over three-quarters believe pronounced market volatility with be a mainstay for 2023, according to a recent survey from Allianz Life. Managed futures remain a compelling investment in 2023 for their ability to capitalize and outperform during times of market volatility and downturn.

Allianz Life Insurance Company of North America announced the results from their recent Q4 Quarterly Market Perceptions Study conducted in December 2022, and found that 62% of Americans believe major recession is near and a full 77% believe that the markets will remain “very volatile” in 2023. Continued volatility will prompt 65% of respondents to alter their retirement as well as their investment plans this year, up from 57% last year.

Almost two-thirds of Americans polled (65%) are so concerned with market conditions that they would prefer to leave the money in cash than stay invested during market volatility.

“It’s understandable that people are worried about market risks as we start the new year, and while it might feel a little counterintuitive, it’s important to remember that money left out of the market – even in times of volatility – isn’t working hard for you,” said Kelly LaVigne, vice president of consumer insights at Allianz Life, in the press release. “This money, while subject to potential market drops, will also miss out on gains when the market recovers. Timing the market is always a bad idea.”

Invest for Volatility With DBMF

Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. With the economic downturn and challenges ahead this year, DBMF could be positioned for continued outperformance; at a minimum, it offers strong hedging potential for equity underperformance in the near term and helps take the guesswork out of timing market performance.

DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. It is an actively managed fund that uses long and short positions within the futures market on several asset classes: domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).

The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine, which analyzes the trailing 60-day performance of CTA hedge funds and then determines a portfolio of liquid contracts that would mimic the hedge funds’ averaged performance (not the positions).

DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value and takes short positions in derivatives with exposures expected to fall in value.

DBMF has management fees of 0.85%.

For more news, information, and analysis, visit the Managed Futures Channel.