Throughout 2018, we published research on managed futures and what we believe makes it compelling as the next asset class. As a result of integrating several non-correlated assets and trading strategies into one product, investing in managed futures has historically provided: improved risk-adjusted returns, reduced correlation to traditional asset classes, a more favorable drawdown profile, and crisis alpha. In this report, we shift our focus to selecting a managed futures product, integrating that product into your portfolio, and setting expectations for the risk/return profile of your overall portfolio. In particular, we focus on the use of a blended equity/managed futures product, which allows investors to integrate managed futures into their portfolio, while minimizing the risk of investor psychology getting in the way and derailing the long-term benefits of managed futures.

In the middle of a raging bull market, investors may question their investment in a non-correlated product that hasn’t put up equity-like returns. By removing a non-correlated asset class like managed futures, which can also generate crisis alpha, investors have positioned their overall portfolio for significantly more risk if equity markets deteriorate. A blended equity/managed futures product offers a potential solution, especially when taking a 30/40/30 portfolio approach.