Looking for a managed futures ETF? Managed futures strategies appeal to investors looking for total return, with such funds becoming increasingly popular in recent years. With market uncertainty spiking somewhat globally as growth slows in some markets, investing in an alternative-type strategy like a managed futures ETF may appeal.
One such strategy, the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM ) stands out especially, sending a key buy signal per its tech chart.
Managed futures strategies produced serious outperformance last year, but took a hit from the mini bank crisis in the spring. Despite that, however, KMLM has proved its resilience as a performer. The strategy has outperformed its ETF Database Category and FactSet Segment averages year to date and over the last month. It’s also set to hit its three-year ETF mark this December.
See more: An Advisor’s Guide to Demystifying Managed Futures
Per its tech chart, the ETF is also sending a key buy signal. Its price has risen above both its 50- and 200-day simple moving averages (SMAs). At the same time, its 50-day SMA rose above its 200-day SMA recently, creating a so-called Golden Crossover. Investors looking for momentum in tech patterns tend to put a lot of emphasis on both those signals.
How, then, does the strategy invest? KMLM invests in commodity, currency, and global fixed income futures contracts via a modified version of the MLM Index. It aims for total return using long and short positions in those asset areas. The strategy rebalances its portfolio monthly with contracts rolled on a market-by-market basis.
A managed futures ETF could offer an intriguing option for investors right now. With concentration risk and the specter of further rate hikes looming over U.S. investors, an alternative assets-focused ETF could appeal. Charging 90 basis points, KMLM may merit a closer look in the weeks to come for investors looking for such a strategy.
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