Alternative investments are garnering renewed attention among advisors and investors that want more than equities and fixed income. As such, one of the oldest iterations of “alts” may be worth examining: managed futures. Once upon a time, the only avenue for accessing managed futures was to go through a commodities trading advisor (CTA) who would construct diversified baskets of commodities on clients’ behalves. ETFs such as the Unlimited HFMF Managed Futures ETF (HFMF ) make that task easier.
The actively managed HFMF debuted in July. For advisors and investors interested in managed ETFs, there’s a lot to like about the Unlimited ETF, including its 0.95% management fee. Comparing apples to apples, that’s significantly lower than the 2%/20% fee model employed by hedge funds offering managed futures strategies. In fact, hedge funds aren’t part of the HFMF selection universe.
Managed Futures Ins and Outs
One thing novice investors should note is that simply because CTAs are part of the managed futures process, that doesn’t mean these products are solely driven by commodities.
“But nothing could be further from the truth as CTAs by and large trade financial futures. True, while there are some CTAs that might focus a managed futures portfolio on commodities, many CTAs usually emphasize financial futures, such as stock index futures and interest rate futures, because those markets are exceptionally liquid and transaction costs are minimal,” according to CME Group.
HFMF embraces the ability of managed futures strategies to diversify. Several of its top 10 holdings include assets such as U.S. equity and Treasury futures, as well as exposure to multiple foreign currency futures. For the purists, rest assured that four of HFMF’s top 10 holdings are commodities futures.
Certain factors may augur well for HFMF, including what feels like an unrelenting rally in stocks and the likelihood that interest rates are poised to decline materially into 2026. Additionally, the tepid 2025 performance of some managed futures strategies, not necessarily HFMF, is inline with historical precedent for the type of market climate investors are dealing with this year.
“This type of whipsaw environment limits the efficacy of the average medium-term trend-followers signal, as they end up constantly adjusting their position size and often fail to meaningfully capture any trends occurring. Looking ahead, we believe their uncorrelated return profile and downside mitigation during prolonged drawdowns have an important role in a diversified portfolio,” according to LPL Financial.
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