The year started off with a bang. US President Donald Trump’s threats to take over Greenland and impose related tariffs on European countries rattled markets, sending gold to a record high of almost $5,000 per troy ounce, while the dollar plunged. At the same time, Japanese government bond yields soared as a plan to cut taxes and increase spending triggered anxiety about one of the world’s most heavily indebted governments
That’s shining a spotlight on a little-known investment approach called managed futures, within a corner of the universe called liquid alternatives. The hedge-fund-like strategy uses futures to spot nascent market trends. Also known as trend-following funds, managed futures make money because investors react to new information too slowly, even as trends are building. “Managed futures have a long track record of diversifying risk in traditional portfolios,” write Morningstar analysts Lan Anh Tran and Ryan Jackson “Their diversification benefit justifies their place in a portfolio during market downturns.”
We checked in with Andrew Beer, a hedge fund veteran and managing member of investment firm DBi. The firm oversees the iMGP DBi Managed Futures Strategy ETF DBMF, which invests in futures contracts in 10 major markets.
So far this year, the ETF is up 5%, versus a 1.4% gain for the stock market as measured by the Morningstar US Market Index. That outperformance isn’t always the case, of course. Last year, the fund was up just 13.8% versus the US Market Index’s gain of 17.4%. Still, the fund trounced the 3.7% gain on the average systematic trend fund tracked by Morningstar in 2025.
In a lively interview, Beer shared what trends he’s following and the case for managed futures funds in a long-term portfolio. This conversation has been edited and condensed for time and clarity.
Bullish on Non-US Stocks, Bearish on the Japanese Yen
Norton: What trends do you see today?
Beer: The managed futures space is having a terrific January, with a lot of themes hitting at once. Fingers crossed that 2026 will be nice and trendy.
Managed futures is an investment strategy where people are trying to detect big changes in the world, like inflation coming back. These transitions are very difficult for most investors and wealth managers to navigate. Most of the time, the world doesn’t change a lot. But when it does, the standard playbook of not panicking and not adjusting your portfolio can struggle.
The funds study stocks, bonds, currencies, and different kinds of commodities to detect early indications that the world is changing. They’re looking for signs that somebody sophisticated and knowledgeable knows that the world is changing. When they see it, they jump on. We are very short on the Japanese yen, slightly short on the S&P 500, and very long on non-US equities.
This could shape up to be a very good year for many trends. The debasement of the dollar could continue for multiple years. That may continue to play out in gold. There is a broad consensus that equities still have a huge tailwind despite higher valuations. It’s even more so with non-US equities versus US ones. In the foreign exchange markets, Japan is conducting a scary economic experiment [with having borrowed so heavily], and so you could see a collapse of the yen as well.
Trends often form when known risks start to spiral. We could have a spiraling depreciation of the dollar against, say, the Euro. Against the yen, it’s a good question. The dollar has been declining, but the yen has been declining more. These trends tend to play out over six to 18 months. They tend to be the best opportunities for [managed futures] strategies, because the funds have enough time to identify and own them.
How Managed Futures Funds Work
Norton: These are also called trend-following funds. How can a fund be trend-following and contrarian at the same time?
Beer: I’ll give you a perfect example. In June of 2020, in the midst of coronavirus, the 10-year Treasury yield had dropped to 50 basis points. Most smart macro thinkers on Wall Street thought interest rates would go negative. That’s how bad the recession was. By September, rates had climbed back up to 70 basis points. That was enough of a signal to these investors that we weren’t going to negative interest rates. Rates then climbed for the next two years. And you could have made the same argument with gold, when it was below $3,000, when there was enough of a movement to suggest the world was changing and there would be a comprehensive effort by the US government to devalue the dollar.
So the term “trend-following” is accurate on a very small basis. What’s most valuable is when you pick up what’s going to change over the course of a year or two, not what’s going to change over a month.
Norton: How is your fund different from others?
Beer: When we got into the ETF space in 2019, there were two [managed futures] funds with $300 million in assets under management. There is close to $5 billion today and a proliferation of new products from BlackRock, Invesco, and Fidelity. There are perhaps a dozen managed futures ETFs. Each has a slightly different approach to the best combination of models, instruments, the things that cause most allocators’ eyes to glaze over. We do something called hedge-fund replication, looking at what the leading players in the space are doing [through managed futures], trying to cut through the noise of complexity and synthesizing what they do.
Our strategy invests in futures contracts in 10 major markets: the S&P 500 for US equities, non-US developed market equities, emerging market equities, two-year Treasuries, 10-year Treasuries, 30-year Treasuries, the dollar versus the yen, the dollar versus the euro, and gold and oil. In each of these, we may be betting that they’re going up or down. The exposures shift between these markets over time.
It’s a highly dynamic strategy, because it isn’t announced when the world changes, it isn’t announced, which can wrongfoot traditional investors and allocators. The goals of DBi are to make investing in diversifiers easy, to do well during bad environments, and to be in a client-friendly vehicle like an ETF at an attractive price point, in a way that’s as tax-efficient as possible. It’s something that I can use for straightforward exposure, like the way the S&P 500 gives me straightforward exposure to equities.
Norton: For example?
Beer: Take a year like 2022, when the fund was up more than 20%. We were a beacon of green in a sea of red. To the shock of most allocators, stocks and bonds both went down 15%-20% after the Ukraine invasion, when inflation came back. Diversification was dependent on stocks and bonds not going down at the same time. People had to tear up the playbook. Oil spiked after the invasion, interest rates rose, and the dollar was very strong, particularly versus the yen. The average investor doesn’t have exposure to these. What did well? Managed futures.
How DBMF Navigated Trump’s Tariffs
Norton: What was “Liberation Day” like for you?
Beer: For many managed futures funds, 2025 was very difficult. They are very good when the world changes, but they struggle when it’s a very noisy status quo. Remarkably, the world didn’t change much in 2025. We didn’t have a recession or runaway inflation, DeepSeek didn’t blow up US capital investment in artificial intelligence, we didn’t have a contagious bond market tantrum. We had an extraordinary amount of noise from the world’s preeminent noise-generation machine.
Crazy market whipsaws are often hell for this strategy. Multiple markets were trending in different ways, on the basis that Liberation Day wouldn’t happen. Then came sharp reversals across different markets at the same time. Unpleasant as these are to live through, they’re a natural feature of any investment strategy.
We did much better than the overall space last year by focusing on the big picture: a huge tailwind behind equities that was disrupted briefly by Liberation Day, but one that resumed throughout the course of the year. The dollar was in depreciation mode, but it strengthened briefly in the second half. Gold has been on a historic run. We didn’t overthink it. We were long gold all year.
We embraced equities after Liberation Day, when most people were expecting tariffs to drive the economy into recession and for inflation to take off.
Norton: Liquid alternatives haven’t covered themselves in glory. And now the administration wants to open 401ks to private investments.
Beer: The broader liquid alts market has been a slow-moving trainwreck for 15 years. The Wilshire Liquid Alternative Index has generated 2%-3% per annum at a time when equities have gone up 10%-15%. More damningly, the correlation between most of these strategies and the S&P 500 is 60%-90%. The broader liquid alternatives space is basically a way for asset managers to generate fees at the expense of clients. Managed futures is a diversifying strategy.
The private world is very different. It’s predicated on the idea that you don’t mark things to market, so you don’t know the risks in the portfolio until it’s too late. We’re focused on allocators looking for things that offer clients daily liquidity, and on client-friendly vehicles, which has not been the case for the illiquid vehicles.
What Advisors Need to Know About Managed Futures Funds
Norton: What are the biggest roadblocks for advisors?
Beer: Many advisors who use ETFs have conditioned their clients to expect extremely low-cost, index-based products. Most ETFs in the managed futures space come with fees of 0.7%-1.0% and are framed as active products. So they don’t fit well into many ETF models.
Second, managers often try to impress RIAs and advisors with how many complicated, sophisticated things they can do. That structurally backfires, because the advisor is thinking about how to explain to clients how it will help them over time. The price point and the education route have been the biggest obstacles. We’re obviously making progress. Most of the progress is from model portfolios.
The category of managed futures is like private credit 25 years ago or private equity 35 years ago. Allocators are becoming more educated, learning how to spot products that are designed well versus those that are designed poorly, as well as how to educate their clients.
I don’t expect that managed futures will be 10% of portfolios, but maybe 3% or 5%. And that’s versus zero today. There’s $4.5 trillion of ETF model portfolios, of which managed futures represent a few billion.
People who succeed as allocators to the strategy should spend time thinking not just about 2022 but also periods when managed futures did less well, like right after Liberation Day, or when we gave back some of our 2022 gains in 2023.
Over 25 years, managed futures as a strategy has had drawdowns, but they’re never catastrophic. The worst drawdown [peak-to-trough decline] in equities was 50% for the S&P 500 during the dotcom bust. The second worst was 40% during the global financial crisis. Our strategy has never gone down more than 16% over 25 years, most recently from April 2024 to the trough after Liberation Day. And bonds have gone down more than 16% over that period of time.
The managed futures strategy is almost unique in that it has zero correlation with both stocks and bonds over time. It’s a liquid strategy. There’s no leverage inherent where somebody’s calling you to get repaid. There are no catastrophic unwinds. If an advisor’s goal is to build a more durable portfolio for clients, bringing in something that has no correlation either way increases your chances of doing well in difficult markets. So understanding what it’s like to live with this strategy is a critical part to broader adoption. I’ll go down with that with a sword in my hand.
