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708700.0 | 2023-08-15 00:00:00 UTC | Evolving Equity Outlook: A Guide to DBMF’s July Performance | DBMF | https://www.nasdaq.com/articles/evolving-equity-outlook%3A-a-guide-to-dbmfs-july-performance | nan | nan | The equity outlook and macro environment continue to evolve in the U.S. as inflation incrementally drops and the economy proves resilient. Advisors and investors searching for a fund capable of shifting positions to align with the changing outlook need look no further than the iMGP DBi Managed Futures Strategy ETF (DBMF).
July brought with it a big change in the recession narrative as the economy continued expansion. Alongside resilient spending and improving consumer confidence, unemployment remained near half-century lows and inflation continued to ease while wages gained.
The Fed raised interest rates another 0.25%, its eleventh raise in the last eighteen months. The summer of services appeared to be in full swing and talks of recession fell away in favor of the “soft landing” narrative once more.
In such an environment, the iMGP DBi Managed Futures Strategy ETF (DBMF) held relatively steady from a performance perspective. It was down slightly for the month, dropping 0.36% but outperformed the SocGen CTA Index and the Morningstar U.S. Trend Systematic Category.
Under the hood, the fund experienced some fairly substantial position changes to reflect the changing macro outlook.
“We’ve gone from very short crude oil — which we interpreted as a recession hedge — to close to flat,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video.
Another notable change included moving out of a long position on gold to a short one. “Both shifts make sense in the context of a market less concerned about either recession or runaway inflation,” Beer said.
DBMF remains in a long position in the euro and a short one in the yen. The short yen position experienced reductions, however, on indications from the Bank of Japan in a potential policy shift.
“On the rates side, we’re now short Treasuries across the board,” explained Beer. This is in contrast to previous positioning in mid-March in the wake of regional bank collapses when the fund took a long position in the 10-Year Treasury.
DBMF Positions for the Everchanging Equity Outlook
DBMF increased its long position in the S&P 500 as of the end of July. The fund is currently short EAFE, but swapped from a short position to a long one in emerging markets. It’s a trade that Beer is particularly interested in in regards to EAFE versus the S&P 500.
“Several months ago ‘long EAFE vs the S&P 500’ was a big trade among fundamentally driven hedge funds,” Beer said. “The thesis was that higher rates would benefit value stocks, and there are more of those outside the US these days.”
It’s a trade that is challenging hedge funds currently long EAFE and short the S&P 500. Managed futures funds moved out the trade fairly rapidly as the narrative evolved and currently sits opposite.
“Time will tell who is right here,” mused Beer.
DBMF is an actively managed fund. It uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The Dynamic Beta Engine determines the position that the fund takes within domestically managed futures and forward contracts. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Advisors and investors searching for a fund capable of shifting positions to align with the changing outlook need look no further than the iMGP DBi Managed Futures Strategy ETF (DBMF). “We’ve gone from very short crude oil — which we interpreted as a recession hedge — to close to flat,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. In such an environment, the iMGP DBi Managed Futures Strategy ETF (DBMF) held relatively steady from a performance perspective. | Advisors and investors searching for a fund capable of shifting positions to align with the changing outlook need look no further than the iMGP DBi Managed Futures Strategy ETF (DBMF). In such an environment, the iMGP DBi Managed Futures Strategy ETF (DBMF) held relatively steady from a performance perspective. “We’ve gone from very short crude oil — which we interpreted as a recession hedge — to close to flat,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. | Advisors and investors searching for a fund capable of shifting positions to align with the changing outlook need look no further than the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF Positions for the Everchanging Equity Outlook DBMF increased its long position in the S&P 500 as of the end of July. In such an environment, the iMGP DBi Managed Futures Strategy ETF (DBMF) held relatively steady from a performance perspective. | DBMF remains in a long position in the euro and a short one in the yen. Advisors and investors searching for a fund capable of shifting positions to align with the changing outlook need look no further than the iMGP DBi Managed Futures Strategy ETF (DBMF). In such an environment, the iMGP DBi Managed Futures Strategy ETF (DBMF) held relatively steady from a performance perspective. | d805d0e9-5fd1-4b79-9be2-fa0ecd9a2ace |
708701.0 | 2023-08-09 00:00:00 UTC | Bull vs Bear: Do Alts Deserve More Portfolio Allocation? | DBMF | https://www.nasdaq.com/articles/bull-vs-bear%3A-do-alts-deserve-more-portfolio-allocation | nan | nan | Bull vs. Bear is a weekly feature where the VettaFi writers’ room takes opposite sides for a debate on controversial stocks, strategies or market ideas — with plenty of discussion of ETF ideas to play either angle. For this edition of Bull vs. Bear, Karrie Gordon and Nick Peters-Golden discuss the case for trading in the old 60/40 portfolio for an alts augmented 50/30/20 portfolio.
Karrie Gordon, staff writer, VettaFi: Nick, I can’t wait to dive into the world of alternatives with you and why boosting their weighting in a portfolio just makes sense these days. In a panel from the recent Fixed Income Symposium hosted by VettaFi, Hamilton Reiner of JPMorgan Asset Management said something that really stuck with me. While Reiner anticipates investors will employ a 60/40 traditional portfolio mentality for risk, the actual modern portfolio will likely be closer to a 50-30-20 composition. This means 50% allocation to stocks, 30% to bonds, and 20% to alternatives and other enhancement strategies like covered calls.
A 20% allocation to alternatives and alternative strategies may seem significant but it makes sense. We’re in a new market regime now that the decade-long Fed put on markets is gone. That means greater volatility as a base case, and boosting portfolio diversification beyond just stocks and bonds seems logical to me in such an environment.
Nick Peters-Golden, staff writer, VettaFi: Look, I appreciate the desire for diversifying away from the 60/40 portfolio. That’s pretty much the definition of “thinking outside the box.” However, to lean on another idiom, investors also don’t need to reinvent the wheel. Alts have drawbacks of their own that investors and advisors need to consider. I think that may create an outlook just as murky – if not more so – as the 60/40’s outlook right now.
An Elegant Alternative for a More Modern Age
Gordon: Alternatives span several asset classes and aren’t the soaring, consistent returns producers that equities are. They’re not meant to be, though. The non-correlated return stream means that in times of equity or bond crisis, they can help keep returns afloat.
I can’t talk about alts without first talking about liquid alts, given their somewhat recent popularity. Liquid alts ETFs have really stepped into their own in the last few years, gaining increasing investor attention when equities, bonds, and markets plummeted. You need look no further than the $1 billion in inflows into the iMGP DBi Managed Futures Strategy ETF (DBMF) last year for proof that these hedge fund strategy ETFs can offer real value to portfolios during market dislocation and stress.
Liquid alts offer a wide range of strategies, from equity long/short to managed futures and more. They’re complex funds, but they’re well worth the extra education if you ask me. While they’re often quiet, albeit steady performers when markets are calm, it’s during dislocations and market stress that these funds typically shine. Let’s look back again at the COVID crash of 2020.
When the S&P 500 plummeted over 30%, liquid alts ETFs declined significantly less. The iMGP Dbi Hedge Strategy ETF (DBEH) dropped 17% between February 1 and March 23, 2020, when the S&P 500 hit its lowest point. Over the same period, the ProShares Hedge Replication (HDG) dropped 12.8% while DBMF dropped 2% on a total return basis. By the end of 2020, DBEH outperformed broad equities, up 23.53% in total returns compared to SPY’s 18.42%.
How Do Alts Perform During Prolonged Volatility?
These funds also held up in the prolonged volatility and challenges of 2022 considerably better than broad equities and bonds. DBMF ended the year up 21.53% on a total return basis while DBEH dipped 6.04%. HDG fell 8.48%, the iShares Core US Aggregate Bond ETF (AGG) dropped 13.03% and the SPDR S&P 500 ETF Trust (SPY) tumbled 18.17%. What’s more, most outperformed stocks and bonds with less volatility.
I’d also like to note that in the equity outperformance of this year, HDG and DBEH are both up 4.8% and 5.8% respectively. DBMF is down 4.91% but continues to recover from the trend reversal in the wake of the March banking crisis. Even this year’s sharpest drawdown for DBMF (14%), the largest since launch in 2019, still pales in comparison to the 35% drawdown in the S&P 500 over the same period.
Liquid alts offer strong diversification opportunities with their low correlations. They are general enhancements to portfolios during times of market calm, and significant performers when markets are under duress. Expanding your portfolio to include more of these strategies in the new market regime of greater volatility seems like a long-term win to me.
Alts: Liquid Enough?
Peters-Golden: We talk about alts as a diversifier in a scenario in which equities and bonds both struggle and again, I can see the appeal. Alternative investments aren’t the silver bullet for volatility, however. First of all, a huge swathe of alts strategies lack the liquidity that investors need in such environments.
Many of these strategies owe their approaches to hedge funds where illiquidity is standard. Investing in private equity, art, hedge funds, crypto, or even real estate can pose thorny liquidity questions. There’s a reason why alts managers are adapting existing alternative strategies to gear them more towards retail investors.
Investors cite liquidity as a key concern about getting into alts. Nearly half of the advisor respondents to a recent 2023 investing trends survey pointed to liquidity as a concern when considering adding alts to client portfolios.
Now, of course, we’re in the ETF world where the real conversation focuses on liquid alternatives. Liquid alt funds exploded after the Great Financial Crisis of 2007-2008, but they’re not much better. Plugging illiquid assets into a liquid format doesn’t magically make those assets more maneuverable.
However, to me, the big concern with liquid alts is that they come with big opportunity costs. Sure, you can get those assets out “somewhat” faster than in a private equity fund. Yes, that might mollify clients in a big downturn.
Still, it takes time – valuable time when many investors stay out of the market too long in bear environments. Some estimates find that poor market timing cost investors about 50 basis points of return annually between 2005 to 2019. Adding more time delay makes it harder to take advantage of the market bottoming out. When looking at your market neutral, long-short equity, or managed futures strategies, remember the opportunity cost of missing out on the market bottom.
Commodities Help Hold the Line in Crisis
Gordon: Fees are most assuredly something to be aware of when looking to liquid alts, but all three funds that I mentioned before currently have management fees of less than 1%. When you compare that to the significant fees that hedge funds carry with their 2/20 model, it’s noteworthy savings. The ETF vehicle provides access to these strategies previously reserved for institutional investors at reasonable costs.
The role of alternatives as a loss-mitigating mechanism cannot be overstated. Let’s pivot to look at this through the lens of commodities, one of the most well-known alternatives to stocks and bonds. While they are cyclical, carrying a diversified portfolio of commodities allows for capture as some commodity classes “cycle on” when the unexpected happens, such as Russia’s invasion of Ukraine in 2022, or the COVID-19 pandemic onset.
Carrying exposure to energy commodities such as oil via the ProShares K-1 Free Crude Oil Strategy (OILK) during the equity and bond crash last year proved enormously valuable. OILK ended the year up 27.53% on a total return basis compared to SPY’s -18.11% return or AGG’s -13.03% return.
Let’s step back even further to the COVID-19-induced crash in March 2020. Between February and March 2020, SPY dropped more than 30% on a total return basis. We all know that gold becomes enormously popular when market panic reaches a certain level, and in times of market stress, it proves its mettle.
The max drawdown of the SPDR Gold Shares (GLD) was a 13% drop between February and March 2020. It’s worth noting that by the end of October 2020, GLD was up 23.30% compared to SPY’s 2.94% and AGG’s 6.10% total returns. Alternatives like commodities help portfolios hold the line when equities or bonds crumble – or, more rarely, when both crumble simultaneously.
Transparency, Fees, and Outcome Dispersion
Peters-Golden: Alts and liquid alts strategies in some ways privilege a defensive, cautious mentality – which is why it’s so surprising that they’re so convoluted. These strategies lack transparency, and their complexity makes it harder for investors to plan – a key reason why they’re sought after in the first place. Investors losing money unexpectedly because a complicated liquid alts strategy responds to market events differently than expected hurts quite a bit.
That gets at this idea that alts products can be “safer.” Alts investments produce much more return dispersion than stocks and bonds do. So yes, say we get another year like 2022 where fixed income is moot and equities are down. You could lean on alts in hedge fund-like strategies or private equity, but that’s a risky proposition. Look at this graph from CAIS: yes, you could do very well – but that’s not the reason many advisors look to alts. If portfolios are down, you need ballast, not more risk.
Image source: CAIS
I’d like to quote BlackRock here on return dispersion in alts, if I may: “Past returns and category rankings can be helpful in selecting traditional investments, but in the universe of alternative investments, they can lead you to a product that does not serve the purpose you intended and can even have a detrimental effect on your portfolio.” Can some alts products give you that meaningful “anti-beta” approach? Yes. But you have to pick the right one.
Alts as Diversifiers, but at What Cost?
Finally, let’s talk about one problem that’s simpler to understand, but maybe even tougher to swallow – the fees. Say you had the forethought to own the AGF U.S. Market Neutral Anti-Beta ETF (BTAL) at the start of 2022 and held it until now. Yes, BTAL outperformed SPY pretty well, 5.6% to -3.7%. That’s meaningful.
However, BTAL charges an eye-popping 154 basis point (bps) fee. That’s nothing to scoff at. Sure, investors and advisors want performance first and foremost, even if that’s a full 145 bps more to pay compared to SPY. I’ll give you that.
That said, taking the same crystal ball approach, buying and holding the WisdomTree Floating Rate Treasury ETF (USFR) on January 1st would have produced nearly the same return that BTAL did, 5.2%, charging just 15 bps. As an alts ETF, BTAL whooped SPY – but that’s where your fixed income allocation stepped in. USFR’s slow and steady approach outdid BTAL even when BTAL could have profited from both last year’s stock market doldrums and this year’s recessionary rumors.
Don’t Break Up With Commodities — Break Out
Gordon: One of the biggest conundrums when it comes to commodity investing is their cyclical nature. It can be difficult to predict when oil will unexpectedly cycle on or off. Take this summer with crude oil price spikes of 21% in the last six weeks. There is a lot to be said about trying to time commodity exposure, as you noted.
There are new opportunities in commodities if you're hesitant about including more cyclical exposures. One subset of metals is set to break out of their historical cyclical rotation. Instead, they are pivoting to exponential demand increases in the next 30 years. The global demand shift is set to create what some have termed a “super cycle”.
Electrification metals necessary for the energy transition are forecast for significant demand increases in the next decade and beyond. These include metals with use cases in batteries, electric vehicles, wires, and more. Bloomberg New Energy Finance estimates $10 trillion in metals will be necessary to meet Paris Agreement goals.
Image source: BloombergNEF
Limited Supply & Negative Correlations
Alongside enormous demand increases for transition metals is the reality that supply cannot logistically keep up. I wrote about the looming copper shortage recently, but it’s a systemic issue in metals worldwide. It also creates significant price opportunities for investors, given the longer-term supply and demand imbalance forecasted.
What’s more, these electrification metals had negative correlations to the S&P 500 over the last five years. A basket of metals such as those that make up the Kraneshares Electrification Metals Strategy ETF (KMET) generated a correlation of -0.30 to the S&P 500 between February 28, 2018 and February 28, 2023. The basket includes lithium, copper, nickel, aluminum, zinc, and cobalt futures.
KMET has a management fee of 0.80%. While this is steeper than some funds, given the outlook for metal prices it seems a marginal price to pay for exposure. An alternative fund within the space is the Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) with a management fee of 0.59%.
Transition metals offer all the benefits of alternatives as strong portfolio diversifiers. They also offer a rather unique opportunity within commodities, given the impending “super cycle” of the next three decades.
Go Abroad, Young Investor
Peters-Golden: So far, our discussion has focused on the 50/30/20 portfolio compared to the standard 60/40 and focused entirely on the U.S. market. Given how well the U.S. stock market has done and of course, how relevant it remains for U.S. investors, that makes sense. However, we haven’t even considered another way to diversify away from the U.S. stock market – looking abroad.
Yes, factors like the U.S. dollar and economy will still impact foreign markets, but for the most part, you’re not getting equities uncorrelated from U.S. equities. The reason why U.S. investors have hesitated when considering foreign equities is that U.S. stocks have outperformed international stocks in eight of the last ten years.
Historically, international stocks have outperformed when U.S. returns dipped below 4%. Based on that, international stocks deserve a place in the conversation as a diversifier. Investors have already been looking abroad more this year given how expensive U.S. equities are. The Fed, having put an end to the monetary regime that’s defined U.S. markets for more than a decade, has also helped to reinvigorate the case for international diversification.
Now it is true that international diversification proves its worth in much longer time frames than just a one-year blip. However, if we’re talking about the pros and cons of switching away from a 60/40 to a 50/30/20 portfolio, international diversification strongly boosts the case for the former. The ease, lower cost and liquidity available in international equities that can still diversify renders the alts case nearly moot.
How Will You Weigh in on Alts?
Gordon: Nick, you’ve given some really good reasons on why advisors and investors need to be educated on some of the pitfalls of alts investing. I’m not a rose-colored glasses type of person, and like any investing strategy, alts carry their own risks. I genuinely believe the benefits can outweigh the risks though and that they deserve an increasing portion of any modern portfolio.
We're in an environment without a Fed put in markets anymore and globalization appears to be fraying at the seams. Market volatility and the potential for unexpected risk seem higher than it has been in the last decade. Alts could prove to be a portfolio ballast should markets once again turn for the worse.
Peters-Golden: I appreciate your insight on this one, Karrie. I can see the case for them, of course. You did a great job outlining how alts are a diverse category with all kinds of strategies therein. As ever, thanks for chatting with me!
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | You need look no further than the $1 billion in inflows into the iMGP DBi Managed Futures Strategy ETF (DBMF) last year for proof that these hedge fund strategy ETFs can offer real value to portfolios during market dislocation and stress. Over the same period, the ProShares Hedge Replication (HDG) dropped 12.8% while DBMF dropped 2% on a total return basis. DBMF ended the year up 21.53% on a total return basis while DBEH dipped 6.04%. | You need look no further than the $1 billion in inflows into the iMGP DBi Managed Futures Strategy ETF (DBMF) last year for proof that these hedge fund strategy ETFs can offer real value to portfolios during market dislocation and stress. Over the same period, the ProShares Hedge Replication (HDG) dropped 12.8% while DBMF dropped 2% on a total return basis. DBMF ended the year up 21.53% on a total return basis while DBEH dipped 6.04%. | You need look no further than the $1 billion in inflows into the iMGP DBi Managed Futures Strategy ETF (DBMF) last year for proof that these hedge fund strategy ETFs can offer real value to portfolios during market dislocation and stress. Over the same period, the ProShares Hedge Replication (HDG) dropped 12.8% while DBMF dropped 2% on a total return basis. DBMF ended the year up 21.53% on a total return basis while DBEH dipped 6.04%. | You need look no further than the $1 billion in inflows into the iMGP DBi Managed Futures Strategy ETF (DBMF) last year for proof that these hedge fund strategy ETFs can offer real value to portfolios during market dislocation and stress. Over the same period, the ProShares Hedge Replication (HDG) dropped 12.8% while DBMF dropped 2% on a total return basis. DBMF ended the year up 21.53% on a total return basis while DBEH dipped 6.04%. | 9e10642e-3ace-4145-81eb-9f71d4f24bc8 |
708702.0 | 2023-07-31 00:00:00 UTC | 3 Reasons to Buy and Hold DBMF | DBMF | https://www.nasdaq.com/articles/3-reasons-to-buy-and-hold-dbmf | nan | nan | The constantly evolving economic and market outlook prevented any clear trend from emerging in the first half. This in turn created a broad headwind for trend strategies; without consensus on the outlook, asset classes rose and fell on the ever-changing narrative. Despite the challenges of this year, there is real value in buying and holding managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) in the long term for three core reasons.
Managed Futures Hedge Fund Diversifier
DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. Managed futures provide inherent portfolio diversification due to their low correlations to stocks and bonds. DBMF in particular provides additional diversification within the managed futures space because of its replication methodology.
The position that the fund takes is determined by the Dynamic Beta Engine, which looks at the trailing 60-day performance of the 20 largest SocGen CTA hedge funds. By averaging the performance of these 20 hedge funds, investors can capture the performance of multiple funds all in one.
The benefit to averaging the performance, particularly in CTAs, is that it eliminates single-manager risk. The performance of trend strategies can vary wildly, depending on each individual manager’s methodology. Capturing the average SG CTA performance helps contain the potential for excessive risk that following a single manager in the space entails.
Captures Alpha in Factor Rotations
Managed futures are able to offer long-term positive performance when market volatility is low, making them a valuable inclusion in portfolios. When volatility spikes and market dislocations occur, they can be an invaluable enhancement to a portfolio.
Managed futures have been dubbed the “crisis alpha” generators for their noteworthy performance during times of market stress. Because they are able to rapidly pivot to capture the new market environment during a dislocation, they capitalize on asset class opportunities that slower-moving strategies often miss.
The contracts that DBMF takes positions in span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary). By taking long and short positions across a number of asset classes, DBMF has historically generated outperformance during most strong equity drawdowns since inception.
“Our constant refrain is that managed futures should be a strategic allocation in every diversified portfolio,” said Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF, in a recent video. “I think many investors fear that managed futures will perform poorly when equities rise. That clearly is not necessarily the case.”
DBMF Provides Significant Fee Savings
By capturing the CTA strategy in an ETF wrapper, investors are able to save significantly on management fees. DBMF has a management fee of 0.85%. In comparison, the Morningstar Systemic Trend Average has an expense ratio of 1.74%. Hedge funds typically charge 2/20, with 2% management fees and an additional 20% of profits made above a certain benchmark should the fund do well.
This creates fee alpha for DBMF, as it allows for the fund to retain more alpha generated by the strategy. Even in period of reduced volatility, this fee alpha creates the opportunity for DBMF to generate consistent returns.
DBMF is down 5.26% YTD in the wake of the mid-March regional banking failure. This created a crash of the inflation trade the fund was positioned in for months. DBMF continues to make gains, however. The fund is up 7.16% since March 24 lows.
Investors have a window of opportunity to add this long-term portfolio diversifier at reduced prices. Given the multitude of diversification and alpha potential in the fund, DBMF is a noteworthy fund to consider.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By taking long and short positions across a number of asset classes, DBMF has historically generated outperformance during most strong equity drawdowns since inception. “Our constant refrain is that managed futures should be a strategic allocation in every diversified portfolio,” said Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF, in a recent video. Despite the challenges of this year, there is real value in buying and holding managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) in the long term for three core reasons. | Managed Futures Hedge Fund Diversifier DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. That clearly is not necessarily the case.” DBMF Provides Significant Fee Savings By capturing the CTA strategy in an ETF wrapper, investors are able to save significantly on management fees. Despite the challenges of this year, there is real value in buying and holding managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) in the long term for three core reasons. | Despite the challenges of this year, there is real value in buying and holding managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) in the long term for three core reasons. Managed Futures Hedge Fund Diversifier DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF in particular provides additional diversification within the managed futures space because of its replication methodology. | Managed Futures Hedge Fund Diversifier DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. Despite the challenges of this year, there is real value in buying and holding managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) in the long term for three core reasons. DBMF in particular provides additional diversification within the managed futures space because of its replication methodology. | 739eea50-fe9a-4c29-bd38-b87a57df090f |
708703.0 | 2023-07-27 00:00:00 UTC | 2023 Markets: The Precipice Between Falling and Flight | DBMF | https://www.nasdaq.com/articles/2023-markets%3A-the-precipice-between-falling-and-flight | nan | nan | Markets rallied on Wednesday despite news of another quarter-point interest rate increase from the Fed. The same markets closed lower on Thursday on the heels of higher-than-expected second-quarter GDP, a familiar pattern of the last six months. Ongoing market sensitivity to changing economic data and announcements highlights the precarious position that investors continue to find themselves in as they seek to discern the path forward.
Second quarter GDP came in above even analyst expectations, lifting hopes that the U.S. may very well sidestep a recession for now. Markets appeared to run out of steam however on the heels of the GDP announcement, closing lower after a near-record run for the Dow Jones.
Image source: WSJ
“We’ve turned the corner on the risk here, and instead of being heavily weighted to recession, it’s balanced between recession and not recession,” Amy Crews Cutts, chief economist at AC Cutts & Associates, told the WSJ.
A Tale of Two Markets
Ongoing investor and market uncertainty has been the norm this year, prolonging volatility, while equities continue their strong rally. It’s a tale of two markets as investors remain split between fears of recession and hope for recovery.
The second quarter’s strong GDP is yet another point in favor of avoiding recession. Strong equity performance, a resilient labor market, and falling inflation alongside a still resilient consumer create hope that the U.S. may yet avoid the grips of moderate recession in the second half. Second-quarter company earnings beats add more fuel to hopes of continuing positive gains.
See also: “Equities Rally — but Is There Turmoil Underneath?”
Broad inflation continues to fall from 2022 highs and core inflation showed the first signs of significant easing in June. Core inflation — that excludes food and energy — rose just 0.2% month-over-month and 4.8% year-over-year in June. It’s the lowest core inflation has been since October 2021.
Not everyone sees falling inflation as a positive though. While consumers continue to spend, they are doing so in services, creating deflation in goods. At the same time, unemployment remains near record lows. Unemployment fell to 3.6% in June, and wages gained 4.4% for the month — wage gains now outpace inflation. Wage gains and the labor market are core measurements the Fed looks at when determining monetary policy.
BlackRock sees the months ahead as a “rollercoaster trajectory over the next quarters before inflation likely settles near 3%,” according to strategists.
The Fed hiked rates to the highest level in two decades this week, setting interest rates between 5.25%-5.5%. The regulatory body has taken what’s been dubbed as a “hawkish wait” regarding future hikes. For now, they are in a wait-and-see approach as the longer-term impacts of tightening play out. Continued economic resiliency and wage gains create uncertainty and continued fears of another potential hike later this year.
Prolonged high rates are also likely to dampen consumer spending on big-ticket items this fall. Whether the strong spending on services this summer translates to steadiness in the fall remains to be seen.
Invest for a Multitude of Market Outcomes With Managed Futures
Managed futures strategies are particularly beneficial in an environment of change. This is due to their ability to rapidly adapt to new market trends and outlooks. Should recession indeed play out, the major managed futures hedge funds maintain positions to capture continued slowing. If the economy manages to navigate a soft landing and then lift off, the funds will pivot rapidly to capture the new performers.
See also: “Managed Futures: The Rapid Responders in Crisis and Beyond”
The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. Ongoing market sensitivity to changing economic data and announcements highlights the precarious position that investors continue to find themselves in as they seek to discern the path forward. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. Strong equity performance, a resilient labor market, and falling inflation alongside a still resilient consumer create hope that the U.S. may yet avoid the grips of moderate recession in the second half. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. Strong equity performance, a resilient labor market, and falling inflation alongside a still resilient consumer create hope that the U.S. may yet avoid the grips of moderate recession in the second half. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. Strong equity performance, a resilient labor market, and falling inflation alongside a still resilient consumer create hope that the U.S. may yet avoid the grips of moderate recession in the second half. | 857cc3db-9842-424b-b2ff-ff43a39682c3 |
708704.0 | 2023-07-26 00:00:00 UTC | Equities Rally — but Is There Turmoil Underneath? | DBMF | https://www.nasdaq.com/articles/equities-rally-but-is-there-turmoil-underneath | nan | nan | Equities churn higher as investors increasingly bet on the ability of the Fed to navigate a soft landing. Underneath continued surprising outperformance of equities as they continue to rally this year, however, lie a rash of signals that all is not well with the economy.
The S&P 500 closed Tuesday at its highest level since the beginning of April 2022. Equities continue to surprise to the upside this year, carried higher by mega-cap tech company outperformance. Its performance thus far remains fairly constricted to a handful of names centered around a few growth themes.
Concentration has eased marginally in the last month. That said, with just a short list of companies carrying the majority of gains, it leaves equities in a perilous position should the economy or narrative turn for the worse.
“There’s not a lot of leeway for bad news right now in equities,” Mike Mullaney, director of global markets research at Boston Partners, told WSJ.
As Equities Rally, Recession Indicators Remain Elevated
As of now, the economic horizon looks ominous.
The Conference Board Leading Economic Index, which measures the direction and state of the economy currently, fell again in June by 0.7% to 106.1. It declined more rapidly in the last six months (4.2%) than it did during the preceding six months between June and December 2022 (3.8%).
Image source: The Conference Board
“The Leading Index has been in decline for fifteen months—the longest streak of consecutive decreases since 2007-08, during the runup to the Great Recession,” said Justyna Zabinska-La Monica, senior manager, business cycle indicators, at the Conference Board in a press release. “Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead.”
Currently, the Conference Board forecasts a recession from this quarter to first quarter 2024. It’s a prediction that aligns somewhat similarly with the Fed’s predictions for mild recession in the fourth quarter and first quarter of next year, followed by recovery.
Active investors and hedge funds remain positioned extremely cautiously. Financial Times reported that hedge funds' exposure to cyclical companies versus defensive companies is the lowest it has been since 2011, according to Bank of America data. What’s more, managers of long-only funds continue to avoid cyclical consumer companies as exposure nears its lowest levels on record.
“The risk of recession is still real in our view,” Raphaël Thuin, head of capital markets strategies at Tikehau Capital, told FT. Thuin went on to explain that the alternative asset management firm’s position “in both equities and fixed income are focusing on quality companies that will have more resilience during a recession and be less sensitive to the economic cycle.”
The resilient labor market and a possible end in sight for Fed rate hikes could prove advantageous for cyclical companies, but for now, caution abounds.
Managed Futures Perform Regardless of Market Direction
Managed futures strategies are particularly beneficial in an environment of changing tides due to their ability to rapidly adapt to new market trends and outlooks. Should recession indeed play out, the major managed futures hedge funds maintain positions to capture continued slowing. If the economy manages to navigate a soft landing and then lift off, the funds will pivot rapidly to capture the new performers.
See also: “Managed Futures: The Rapid Responders in Crisis and Beyond”
The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. That said, with just a short list of companies carrying the majority of gains, it leaves equities in a perilous position should the economy or narrative turn for the worse. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. Active investors and hedge funds remain positioned extremely cautiously. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. “The risk of recession is still real in our view,” Raphaël Thuin, head of capital markets strategies at Tikehau Capital, told FT. Thuin went on to explain that the alternative asset management firm’s position “in both equities and fixed income are focusing on quality companies that will have more resilience during a recession and be less sensitive to the economic cycle.” The resilient labor market and a possible end in sight for Fed rate hikes could prove advantageous for cyclical companies, but for now, caution abounds. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. “Taken together, June’s data suggests economic activity will continue to decelerate in the months ahead.” Currently, the Conference Board forecasts a recession from this quarter to first quarter 2024. | 51344614-0a88-4528-8cab-5759e0317d5c |
708705.0 | 2023-07-25 00:00:00 UTC | Goods Fall as Services Rise: Invest for Changing Tides With DBMF | DBMF | https://www.nasdaq.com/articles/goods-fall-as-services-rise%3A-invest-for-changing-tides-with-dbmf | nan | nan | Consumers proved resilient this summer, prompting growing investor hopes of a soft landing this fall. Services are the only real benefiters of consumer spending this summer, however, as weakness in goods grows. It could mean troubled waters ahead, and advisors should consider adding diversification through funds like the iMGP DBi Managed Futures Strategy ETF (DBMF).
The strength of the U.S. consumer continues to be remarked upon in earnings calls this month. "Just look at the consumer, right? I mean, consumer in the U.S. is up at 10% T&E [travel and expenses] is still very, very strong," said Stephen Squeri, chairman and CEO of American Express, on the recent earnings call.
The Fed's Inflation Agenda Plays Out in Goods
It's a completely different story on the goods side, however, as aggressive rate hikes dampen demand. Industrial production in the U.S. fell in June for the second month as demand for goods fell too. Consumer goods production dropped significantly in June, falling 1.3% in the strongest decline since the beginning of 2021, according to the Federal Reserve report. Declines were noteworthy across the board: Utilities fell 2.6%, and manufacturing dropped 0.3%. It’s the largest drop in manufacturing production since March of this year.
[caption id="attachment_528509" align="aligncenter" width="624"] Click to enlarge.[/caption]
Image source: Federal Reserve
“Manufacturing output peaked in October and has seen broad-based declines in back-to-back months,” explained Phil Mackintosh, chief economist at Nasdaq, in the most recent Market Makers email.
The continued drawdown in goods is directly reflected in freight. J.B. Hunt reported in its recentearnings callthat June brought only a slight moderation to recent declines in volume. Volume dropped 4% year-over-year in June compared to 9% in April. For the quarter, volume declined 7% YoY.
While it’s a small reprieve, the company remains cautious regarding its second half outlook.
“June had some positive signs in it. Again, we’re still in a wait-and-see mode for the rest of the year,” said Darren Field, EVP and president, intermodal at J.B. Hunt, on the recent earnings call.
Managed Futures Provide Flexibility in Changing Environments
Markets are increasingly hopeful that the Fed could navigate a soft landing in the second half. Given the continued impact of the Fed's inflation fight on demand for goods and the drawdowns already happening, it seems prudent to remain both cautious and flexible in portfolio positioning. Though inflation continues to fall, markets currently forecast for high rates through the end of this year.
Managed futures strategies are particularly beneficial in an environment of changing tides due to their ability to rapidly adapt to new market trends and outlooks. Should recession indeed play out, the major managed futures hedge funds maintain positions to capture continued slowing. If the economy manages to navigate a soft landing and then lift off, the funds will pivot rapidly to capture the new performers.
See also: “Managed Futures: The Rapid Responders in Crisis and Beyond”
The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It could mean troubled waters ahead, and advisors should consider adding diversification through funds like the iMGP DBi Managed Futures Strategy ETF (DBMF). See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. | It could mean troubled waters ahead, and advisors should consider adding diversification through funds like the iMGP DBi Managed Futures Strategy ETF (DBMF). See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. DBMF has a management fee of 0.85%. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. It could mean troubled waters ahead, and advisors should consider adding diversification through funds like the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF has a management fee of 0.85%. | See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. It could mean troubled waters ahead, and advisors should consider adding diversification through funds like the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF has a management fee of 0.85%. | 3b4ab02a-f483-40f9-9472-e6cf08c4682e |
708706.0 | 2023-07-21 00:00:00 UTC | DBMF Aims for Long-Term Outperformance Through Fee Alpha | DBMF | https://www.nasdaq.com/articles/dbmf-aims-for-long-term-outperformance-through-fee-alpha | nan | nan | It’s been a challenging year for trend-following strategies such as managed futures. Despite prolonged market uncertainty, many funds continue to recover from first quarter crashes. One such fund is the iMGP DBi Managed Futures Strategy ETF (DBMF), which seeks to outperform its hedge fund peers over the long term through fee savings and alpha.
DBMF seeks to capture the average return of the 20 largest managed futures hedge funds, measured by the SocGen CTA Index. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees.
While replication strategy ETFs have continued to grow in popularity in recent years, DBMF consistently proves that its methodology works to maintain high correlations through any market environment.
“Replication is an approximation, not a perfect copy, for obvious reasons,” explained Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF in a recent video.
Despite a precipitous mid-March drawdown on the heels of bank collapse, DBMF maintains high correlations. Compared to its benchmark, the SocGen CTA Index, correlations were above 90% as of the end of June.
Capturing the diversification opportunities of the managed futures strategy within an ETF wrapper allows for greater preservation of capital. The savings in management fees between DBMF and similar managed futures mutual funds and hedge funds is significant.
“Combined with the tailwind of lower fees, our goal is to potentially outperform over time through lower fees and expenses,” Beer explained.
Image source: Dynamic Beta investments
See also: “Managed Futures: The Rapid Responders in Crisis and Beyond”
Portfolio Diversification and Fee Alpha With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
Currently, DBMF is long on the one-year Treasury bill, gold, the euro, and the S&P 500. The fund is short on MSCI EAFE, crude oil, emerging markets, the yen, 10-year Treasuries, and more.
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. While replication strategy ETFs have continued to grow in popularity in recent years, DBMF consistently proves that its methodology works to maintain high correlations through any market environment. “Replication is an approximation, not a perfect copy, for obvious reasons,” explained Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF in a recent video. | One such fund is the iMGP DBi Managed Futures Strategy ETF (DBMF), which seeks to outperform its hedge fund peers over the long term through fee savings and alpha. The savings in management fees between DBMF and similar managed futures mutual funds and hedge funds is significant. Image source: Dynamic Beta investments See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” Portfolio Diversification and Fee Alpha With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | One such fund is the iMGP DBi Managed Futures Strategy ETF (DBMF), which seeks to outperform its hedge fund peers over the long term through fee savings and alpha. The savings in management fees between DBMF and similar managed futures mutual funds and hedge funds is significant. Image source: Dynamic Beta investments See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” Portfolio Diversification and Fee Alpha With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | DBMF seeks to capture the average return of the 20 largest managed futures hedge funds, measured by the SocGen CTA Index. While replication strategy ETFs have continued to grow in popularity in recent years, DBMF consistently proves that its methodology works to maintain high correlations through any market environment. Image source: Dynamic Beta investments See also: “Managed Futures: The Rapid Responders in Crisis and Beyond” Portfolio Diversification and Fee Alpha With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | ea38a6e8-3055-487a-ac62-8095d84ae072 |
708707.0 | 2023-07-20 00:00:00 UTC | Bull vs. Bear: Do Multifactor ETFs Make Sense for Today’s Market? | DBMF | https://www.nasdaq.com/articles/bull-vs.-bear%3A-do-multifactor-etfs-make-sense-for-todays-market | nan | nan | Bull vs. Bear is a weekly feature where the VettaFi writers’ room takes opposite sides for a debate on controversial stocks, strategies, or market ideas — with plenty of discussion of ETF ideas to play either angle. For this edition of Bull vs. Bear, Elle Caruso and Karrie Gordon discuss the case for and against multifactor ETFs.
Elle Caruso, staff writer, VettaFi: Hey, Karrie! Looking forward to discussing the investment case for multifactor ETFs.
The way I see it, multifactor ETFs allow investors to take smarter risks. Especially in the current environment, characterized by a lot of uncertainty, a low volatility overlay can help investors maintain target exposure and stay invested through choppy markets.
Karrie Gordon, staff writer, VettaFi: Hi, Elle! I’m looking forward to diving into multifactor and factor investing with you. Arguments for multifactor investing don't hold up against the enhanced risk inherent in factor investing, in my opinion. Factor drawdowns are pronounced and significant, and I just don’t think most advisors and investors have the stomach for these strategies long-term for a number of reasons.
A Game of Risk in Equities
Caruso: Many investors are unaware that cap-weighted ETFs can introduce unintended risks to portfolios. This includes concentration risk, valuation risk, and volatility risk. Multifactor ETFs seek to target desired return-enhancing factors and reduce exposure to unrewarded risk exposures.
Particularly in the U.S. large-cap space, many investors look to top-heavy, growth-tilted indexes such as the S&P 500. However, being overly concentrated at the company level introduces significant idiosyncratic company risk to a portfolio. Multifactor ETFs seek to avoid concentration at the market cap, sector, and individual company levels.
Additionally, investors can avoid single-factor risks by investing in an integrated multifactor ETF instead of an isolated/sleeve approach. An integrated approach selects securities that fit a number of desired factor characteristics. This approach aims to improve the strength and balance of overall factor exposure within a portfolio. An integrated factor scoring approach typically results in higher factor expression and greater monthly spread returns than an isolated approach.
Multifactor ETFs Aren't Without Risk
Gordon: Investing in factors rose to prominence in the last decade, though factor investing has been popular for much longer. Factor investing is cyclical, which makes factor investing highly susceptible to abrupt trend changes — and sentiment changes — as well as market inflection points. In short, factor investing largely generates more volatile and unpredictable returns.
BlackRock published a great lookback on factor strategies of the last century using Hodrick-Prescott filters to smooth trends and calculate cumulated returns for various factors. The results unequivocally demonstrate the enhanced risk involved in factor investing.
Image source: BlackRock. Click to enlarge.
You need look no further than the popular momentum factor to find a long history of spectacular crashes, dubbed momentum crashes. In April 2009, the momentum trade yielded returns of -36%. In fact, in the three months including April 2009, momentum dropped more than 73%. Between 1999–2019, momentum lost more in its crashes than it made up for in its bull runs.
This performance profile isn’t unique to just momentum. Indeed, each factor carries its own specific risk profile with potential for this caliber of drawdown. The argument for combining factors into a singular strategy is that of diversification, but when market inflection points happen, non-correlated asset classes will often move in tandem. (I’m looking at you, 2022.)
This means that sometimes you inadvertently stack all the crash potential of individual factors into one strategy. When the S&P 500 dropped 30.4% on a total returns basis between February 1, 2020, and March 23, 2020, the Vanguard U.S. Multifactor ETF (VFMF) dropped 38.24% over the same period.
While the longer-term returns level out, I don’t know many investors that are willing to stomach the periods of underperformance, given the magnitude of factor drawdowns.
Risk-Adjusted Return Opportunities
Caruso: Multifactor ETFs have the potential to enhance risk-adjusted returns. The Hartford Multifactor US Equity ETF (ROUS) and the iShares Russell 1000 ETF (IWB) have very similar total returns over a three-year period; however, ROUS looks a lot better on a risk-adjusted basis.
ROUS is a multifactor U.S. equity ETF designed to offer 15% less volatility than traditional cap-weighted indexes over a full market cycle. Notably, about 75% of ROUS’s holdings demonstrate lower volatility than IWB’s underlying index, the Russell 1000 Index. Since 2019, ROUS has had a beta of 0.86, as of March 31.
Relative to the IWB, ROUS is underweight on mega-cap giants including Apple, Microsoft, Amazon, and Nvidia. Instead, ROUS offers more balanced, diversified access to the full U.S. market, reducing concentration risk.
Notably, there is only a 42% overlap by weight between the two portfolios, as of July 17.
Complexity and Concentration Risk
Gordon: Enhancing risk-adjusted returns in current markets is particularly important this year, but I still remain leery that factors are the answer here. Multifactor ETFS may be enticing, but the methodology used in multifactor strategies is often complex and convoluted.
Factor investing requires an extreme level of due diligence and carries a great educational burden. Advisors and investors not only need to understand the importance of looking beyond average returns, but also how the factors are defined and classified in each individual strategy.
Factor investing is convoluted on a fundamental level. Not only is there an ever-increasing variety of factor investing buckets -- there are over 400 factors published in academia as of 2019 -- but there is also no real agreement on how even the largest factors are defined. Take value, for instance, which is one of the longest-established types of factor investing.
Many value strategies look at the book-to-market ratio as a core data point to indicate value. It’s a measurement that increasingly doesn’t hold up in modern markets, however, particularly within the technology sector. Many of today’s tech companies hold little in terms of tangible assets; most of their value is tied up in intangibles.
Some value factor strategies include intangibles, and some don’t. Some strategies weight heavily into less-expensive sectors while shorting expensive industries as a way to capture value. (This particular value factor methodology hasn’t proven to enhance returns on any level.)
Many factor-based funds also end up with heavy concentrations to specific sectors, such as low volatility’s concentration in utilities and real estate between 1991–2018. Multifactor ETFs sometimes mitigate this concentration risk. However, they also have the potential to enhance it, depending on what factors are tracked.
Understanding how factors are defined, what metrics are utilized, and how they’re measured is incredibly important when it comes to this type of investing. Transparency of fund methodology and holdings is critical in factor and particularly multifactor ETF investing.
Taking Multifactor ETFs Global
Caruso: I’ve largely focused on using multifactor ETFs for U.S. large-cap exposure; however, these funds can be even more powerful in the small-cap and international equity space.
U.S. small-caps and international markets are both inherently more volatile than U.S. large-caps. This is where low volatility and value factor expressions can be particularly impactful and lead to outperformance.
[caption id="attachment_527675" align="aligncenter" width="628"] Click to enlarge.[/caption]
For example, the Hartford Multifactor Emerging Markets ETF (ROAM) has demonstrated strong performance this year. ROAM has outpaced the benchmark as well as its passive multifactor category peers. ROAM is up 14.3% year-to-date, while the iShares Core MSCI Emerging Markets ETF (IEMG) is up 9.8%. Meanwhile, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) has returned just 6.9%.
ROAM’s methodology targets the value, momentum, and quality factors for a 15% volatility reduction over a full market cycle. Presumably, it’s the highlighting of those specific factors that has led to the fund’s outperformance.
Better Options for Non-Correlated Returns
Gordon: Those are noteworthy returns in a challenging market environment. However, in an environment fraught with a number of risk factors, factor investing is the equivalent of making a bet on a specific type of market risk. When that risk flips, it can cause serious pain for investors.
Given the prolonged market and investor uncertainty of the last 18 months and the continued uncertainty regarding the Fed path and inflation looking ahead, these seem like subpar times to be making any kinds of risky bets. There are other strategies that could prove better hedges against uncertainty and risk than multifactor investing in today’s environment.
Individual factors are risky and can be extremely painful for portfolios. The momentum factor crashes spectacularly on a semi-regular basis. Further, value factor investing generated annual returns of 1.5% between 2001 and August 2022, according to BlackRock research.
Image source: BlackRock. Click to enlarge.
Multifactor investing works to diversify these risks, sure. However, it comes with both a sharp learning curve and a need for constant due diligence. What’s more, these strategies carry fairly significant tracking errors (up to -21% over a nearly 30-year period, as measured by Nicolas Rabener, managing director of FactorResearch).
Investors looking for diversification opportunities would do better to look to other avenues for non-correlated returns. For advisors and investors that do not mind complexity and due diligence, managed futures strategies are worth consideration. They offer low and often negative correlation to stocks and bonds. They're also known for their ability to respond rapidly to changing market trends. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) and the KFA Mount Lucas Index Strategy ETF (KMLM) are strong contenders within the class.
For those investors looking to keep things simple but with an eye towards concentration risk within equities, the Invesco S&P 500 Equal Weight ETF (RSP) is a fund to consider.
Elle, it’s been really great chatting factors and multifactor ETFs. While the funds you mentioned offer noteworthy short-term returns, overall this investment strategy carries too much enhanced risk and potential pain for portfolios for my taste.
Caruso: Karrie, you make some good points, and I agree that targeting single factors often leads to undesired qualities. For example, you cited RSP. However, targeting the small size factor also introduces greater volatility and tilts away from quality. Multifactor ETFs using an integrated approach have demonstrated their ability to enhance returns and mitigate volatility and other risks. I think this is a huge opportunity for investors and is worth consideration. Plus, unlike managed futures ETFs that charge high expense ratios, multifactor ETFs cost around as much as other equity funds, allowing them to be a core holding in portfolios.
For more news, information, and analysis, visit the Multifactor Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) and the KFA Mount Lucas Index Strategy ETF (KMLM) are strong contenders within the class. Especially in the current environment, characterized by a lot of uncertainty, a low volatility overlay can help investors maintain target exposure and stay invested through choppy markets. The argument for combining factors into a singular strategy is that of diversification, but when market inflection points happen, non-correlated asset classes will often move in tandem. | Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) and the KFA Mount Lucas Index Strategy ETF (KMLM) are strong contenders within the class. Risk-Adjusted Return Opportunities Caruso: Multifactor ETFs have the potential to enhance risk-adjusted returns. The Hartford Multifactor US Equity ETF (ROUS) and the iShares Russell 1000 ETF (IWB) have very similar total returns over a three-year period; however, ROUS looks a lot better on a risk-adjusted basis. | Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) and the KFA Mount Lucas Index Strategy ETF (KMLM) are strong contenders within the class. Arguments for multifactor investing don't hold up against the enhanced risk inherent in factor investing, in my opinion. Multifactor ETFs Aren't Without Risk Gordon: Investing in factors rose to prominence in the last decade, though factor investing has been popular for much longer. | Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) and the KFA Mount Lucas Index Strategy ETF (KMLM) are strong contenders within the class. Arguments for multifactor investing don't hold up against the enhanced risk inherent in factor investing, in my opinion. However, in an environment fraught with a number of risk factors, factor investing is the equivalent of making a bet on a specific type of market risk. | 2ac40ff0-2640-4115-82c4-e004f0c9fad8 |
708708.0 | 2023-07-14 00:00:00 UTC | Managed Futures: The Rapid Responders in Crisis and Beyond | DBMF | https://www.nasdaq.com/articles/managed-futures%3A-the-rapid-responders-in-crisis-and-beyond | nan | nan | The last several years will likely go down as unprecedented moments in market history. Traditional portfolios responded by expanding their allocations beyond just stocks and bonds to include several alternatives and strategies. With the hope of a soft landing now added back into the narrative, the reflex might be to return to traditional allocations. However, some alternative strategies such as managed futures offer long-term benefits to portfolios and are worth retaining.
Market volatility in the last 18 months was pronounced, driven by investor uncertainty as to the path ahead. Equity and bond underperformance last year in the wake of the global geopolitical crisis opened up a window for trend strategies to prove their mettle and their value.
Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) soared, offering stunning performance when little else did. Managed futures strategies invest in several asset classes in the futures market, meaning they offer non-correlated returns to equities and bonds.
The key to why managed futures strategies usually stand out during periods of market crisis and dislocation is that they invest in how assets are actually trading. Because they trade in futures, these strategies take long and, more notably, short positions on asset classes. Through futures, these strategies can generate returns on underperforming asset classes as well as long positions on asset classes outperforming.
Why Holding the Line Can Hurt in the Short-Term
Experienced advisors know the importance of keeping an eye on the long term and not backing out of falling positions in response to market panic. This means that experienced investors are likely to hold onto positions that might not benefit them in the short to medium term.
Managed futures are the rapid responders in crisis. They invest in how asset classes are actually trending, not based on longer-term forecasts and sentiment. They capture the market dislocations that happen as trends reverse but investors remain in less favorable positions for longer. It’s where much of their alpha potential is generated.
A study published in the International Review of Financial Analysis last year found that on average, the indexes of managed futures hedge fund strategies (CTAs) took just 15 days to completely change their positions. This means that in a crisis, within two weeks managed futures funds are positioned for the new, evolving environment.
“I personally think the great competitive advantage of managed futures is that they will coldly exit positions when they stop working,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. “That’s why managed futures were so successful in 2022 – inflation came back too fast for most allocators to adapt."
Image source: Dynamic Beta investments
DBMF brought in over $1 billion in AUM as investors flocked to the hedge fund strategy last year. This year brought the threat of a banking crisis and a strong, immediate trend reversal that caught many trend-following strategies in unfavorable positions. Since March lows, DBMF continues to gain ground and remains positioned to capture a number of trends should they break out on investor confidence in the narrative looking ahead.
“I view managed futures as a hedge against a world that keeps changing fast,” Beer explained. “That certainly seems to describe the world today.”
Augmenting Your Portfolio Long-Term With Managed Futures
Because of their ability to rapidly respond to changing markets, managed futures strategies are worth inclusion in portfolios long-term. Like first responders, these strategies have the potential to help hold the line. They are strategies to mitigate potential losses — and volatility — in market dislocations. Trend-following strategies provide the ability to capture how asset classes are actually trending. This creates alpha potential while the rest of the portfolio pivots more slowly.
Image source: Dynamic Beta investments
Beyond crisis, they are strategies that offer performance potential, particularly when rolled up into the ETF wrapper. The fee savings potential of the ETF vehicle allows for better capital capture for the strategy. Since its inception, DBMF consistently outperformed both the SG CTA Index and the Morningstar US Fund Systematic Trend.
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees.
DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “I personally think the great competitive advantage of managed futures is that they will coldly exit positions when they stop working,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) soared, offering stunning performance when little else did. Image source: Dynamic Beta investments DBMF brought in over $1 billion in AUM as investors flocked to the hedge fund strategy last year. | The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) soared, offering stunning performance when little else did. “I personally think the great competitive advantage of managed futures is that they will coldly exit positions when they stop working,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. | The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) soared, offering stunning performance when little else did. “I personally think the great competitive advantage of managed futures is that they will coldly exit positions when they stop working,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. | The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) soared, offering stunning performance when little else did. “I personally think the great competitive advantage of managed futures is that they will coldly exit positions when they stop working,” explained Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of DBMF, in a recent video. | f3266dec-c64b-43e5-b406-8ecd158e2411 |
708709.0 | 2023-07-07 00:00:00 UTC | DBMF Up 7% Since Banking Crisis | DBMF | https://www.nasdaq.com/articles/dbmf-up-7-since-banking-crisis | nan | nan | Fears of more Fed rate hikes sent markets spiraling Thursday as investor uncertainty spiked once more. Despite the challenges that such an uncertain environment creates for trend following strategies, iMGP DBi Managed Futures Strategy ETF (DBMF) continues to recover from March lows.
Market volatility Thursday on the strong jobs report from the private sector proved yet another thread in the tapestry of 2023 as markets attempt to guess the path of inflation, the Fed, and the economy this year. It’s also a narrative that continues to prove difficult to get right, creating prolonged volatility and uncertainty, particularly in the wake of the banking crisis in March.
DBMF is up 7.16% since March 24 when the fund hit a low for the year. The precipitous fall was driven by the banking crisis and regional bank failure mid-March. This resulted in an abrupt reversal of the inflation trade that buoyed DBMF through much of 2022. Since March 24, the fund continues to recover in a challenging environment for trend following strategies.
See also: “Andrew Beer: 2023 Is the Year of the One Trade Market”
DBMF Continues Recovery Post Banking Crisis
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees.
DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
Currently, DBMF is long the 1-year Treasury Bill, the 10-year Treasury Note, gold, the euro, and the S&P 500. The fund is short MSCI EAFE, crude oil, emerging markets, the yen, and more.
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. Despite the challenges that such an uncertain environment creates for trend following strategies, iMGP DBi Managed Futures Strategy ETF (DBMF) continues to recover from March lows. DBMF is up 7.16% since March 24 when the fund hit a low for the year. | Despite the challenges that such an uncertain environment creates for trend following strategies, iMGP DBi Managed Futures Strategy ETF (DBMF) continues to recover from March lows. See also: “Andrew Beer: 2023 Is the Year of the One Trade Market” DBMF Continues Recovery Post Banking Crisis The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | Despite the challenges that such an uncertain environment creates for trend following strategies, iMGP DBi Managed Futures Strategy ETF (DBMF) continues to recover from March lows. See also: “Andrew Beer: 2023 Is the Year of the One Trade Market” DBMF Continues Recovery Post Banking Crisis The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | See also: “Andrew Beer: 2023 Is the Year of the One Trade Market” DBMF Continues Recovery Post Banking Crisis The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. Despite the challenges that such an uncertain environment creates for trend following strategies, iMGP DBi Managed Futures Strategy ETF (DBMF) continues to recover from March lows. | abe54618-f87e-4733-aacc-5a5ad17b9d84 |
708710.0 | 2023-06-26 00:00:00 UTC | Why Managed Futures Are a Strategic Allocation | DBMF | https://www.nasdaq.com/articles/why-managed-futures-are-a-strategic-allocation | nan | nan | This year remains challenging as investor and market uncertainty persists. Managed futures funds that outperformed last year mostly pulled back in the first half of this year. In ups and downs, however, these strategies remain a strategic allocation for portfolios for their diversification and outperformance potential in market dislocations.
2022 brought with it enhanced and varied market risk for investors, alongside a market regime shift. It’s the exact kind of environment that managed futures strategies shine in, and shine they did. In a year when very few assets and strategies performed, these funds largely soared.
This year has been a reversal of that trend, as market trends shift once more but no clear trends emerge. The certainty of the inflation trade that carried the trend following hedge fund strategies so high in 2022 evaporated in March with U.S. regional bank failures.
Since then, markets and investors remain largely uncertain regarding the path and longevity of interest rate hikes. Add in mixed economic signals regarding slowing and labor market resilience, and uncertainty in the path ahead continues to create market turbulence with no clear trends emerging. For trend following strategies, that creates several challenges.
Crisis Alpha Potential Is Noteworthy
Managed futures strategies cemented their crown in 2022 as crisis alpha generators. It’s this crisis alpha potential that makes them so popular with investors and for portfolios. It’s that potential that Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF) warrants always including in portfolios.
“The most successful allocators to managed futures – the ones who rode the trifecta of big gains during the early 2000s, 2008, and last year – see it as a strategic allocation,” explained Beer in a communication to VettaFi. “Size it appropriately and plan to own it through both good times and bad.”
The hedge fund strategy capitalizes on diversification. Diversification potential is two-fold; exposure to the futures market provides low correlations to stocks and bonds. Diversification across asset classes within the futures market further enhances non-correlated potential within portfolios. It’s this ability to diversify as well as rapidly shift positions as markets rapidly change that allows the strategy to outperform in market dislocations and downturns.
Image source: Dynamic Beta investments
It’s a strategy that can offer performance even in less volatile markets and is worth inclusion in portfolios at all times. Having a managed futures strategy already within a portfolio allows for gains and strong performance potential when a market crisis strikes.
“Allocators who reaped big gains in managed futures in 2022 bought into the strategy before it became hot again,” Beer explained. Anyone who missed 2022 should be laser-focused on adding it today.”
See also: "As Luck Would Have It: DBMF's Investing Coin Flip Anomaly"
Investing in Managed Futures With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees.
DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
“Other allocators dial exposure up or down depending on their macro views and how we’re positioned. We built DBMF with daily transparency to help these guys see what we own,” Beer said. “The secret is to never take managed futures to zero – otherwise it’s too difficult to get back in.”
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance (not the positions).
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It’s that potential that Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF) warrants always including in portfolios. Anyone who missed 2022 should be laser-focused on adding it today.” See also: "As Luck Would Have It: DBMF's Investing Coin Flip Anomaly" Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. | It’s that potential that Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF) warrants always including in portfolios. Anyone who missed 2022 should be laser-focused on adding it today.” See also: "As Luck Would Have It: DBMF's Investing Coin Flip Anomaly" Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. | Anyone who missed 2022 should be laser-focused on adding it today.” See also: "As Luck Would Have It: DBMF's Investing Coin Flip Anomaly" Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. It’s that potential that Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF) warrants always including in portfolios. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. | It’s that potential that Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF) warrants always including in portfolios. Anyone who missed 2022 should be laser-focused on adding it today.” See also: "As Luck Would Have It: DBMF's Investing Coin Flip Anomaly" Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. | 299034de-f116-4ea7-8278-4007e99b2558 |
708711.0 | 2023-06-23 00:00:00 UTC | As Luck Would Have It: DBMF’s Investing Coin Flip Anomaly | DBMF | https://www.nasdaq.com/articles/as-luck-would-have-it%3A-dbmfs-investing-coin-flip-anomaly | nan | nan | A string of good luck, a stroke of bad luck, the luck of the draw. Ask any investor that’s been in the markets long enough and they’ll tell you a story about the time they caught that lucky break, or when their portfolio fell on a string of bad luck. While there’s likely a rational explanation underlying the swings of fortune (or misfortune), sometimes investing really can just feel like flipping a coin.
Turns out, it’s the same for investing strategies, at least according to Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF).
“Every strategy has an element of luck,” Beer said in a communication to VettaFi. “Just like flipping coins, you will have hot and cold streaks, but over time it washes out. As an allocator, the key is to make sure the coin isn’t broken.”
DBMF's 2023 Hard Luck Investing Story
2023 continues to prove challenging for DBMF, a managed futures hedge fund replication ETF. The fund continues to underperform the SocGen CTA hedge fund index YTD. The strategy and replication model are working as intended, with correlations at normal historical levels. The fund currently has an almost 89% correlation to the index.
The underperformance is instead due instead to the specific “factor set” DBMF currently employs, Beer explained in a recent DBMF monthly performance video. While the fund trends up and down with the SocGen CTA Index, it is more narrow in scope than broad-reaching hedge funds. This means that while sometimes the fund outperforms the index, sometimes it underperforms too and misses opportunities the hedge funds may have captured.
Image source: Dynamic Beta investments
This year’s performance is statistically akin to flipping five or six tails consecutively. It’s the worst rolling six-month performance for DBMF since its inception in 2019. Beer refers to the odds as a three-sigma event, putting the odds at one in 100 for such a performance.
It’s worth noting that the luck (monthly noise of replication) does work in the other direction too. While current performance is statistically rare, it’s not “unprecedented” as Beer explained in the video.
Over a longer timeline, performance invariably smooths out. This allows the strategy to capitalize on the fee savings that the ETF wrapper provides. Over long timelines, DBMF outperforms more often than it underperforms.
“Since 2016, we’ve seen that there are periods when we’re flipping more heads than we expect, and others when we’re flipping more tails,” Beer wrote to VettaFi. “We think we’ll look back on the first several months of 2023 as a great example of the latter, but also a case study that the strategy recovered as expected.”
Seize the Investing Opportunities in DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. The fund is currently down 5.32% YTD, presenting an opportunity to gain access to the popular strategy at a discount. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. It also takes short positions in derivatives with exposures expected to fall in value. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. Turns out, it’s the same for investing strategies, at least according to Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF). | Turns out, it’s the same for investing strategies, at least according to Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF). “We think we’ll look back on the first several months of 2023 as a great example of the latter, but also a case study that the strategy recovered as expected.” Seize the Investing Opportunities in DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. As an allocator, the key is to make sure the coin isn’t broken.” DBMF's 2023 Hard Luck Investing Story 2023 continues to prove challenging for DBMF, a managed futures hedge fund replication ETF. | As an allocator, the key is to make sure the coin isn’t broken.” DBMF's 2023 Hard Luck Investing Story 2023 continues to prove challenging for DBMF, a managed futures hedge fund replication ETF. “We think we’ll look back on the first several months of 2023 as a great example of the latter, but also a case study that the strategy recovered as expected.” Seize the Investing Opportunities in DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. Turns out, it’s the same for investing strategies, at least according to Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF). | As an allocator, the key is to make sure the coin isn’t broken.” DBMF's 2023 Hard Luck Investing Story 2023 continues to prove challenging for DBMF, a managed futures hedge fund replication ETF. “We think we’ll look back on the first several months of 2023 as a great example of the latter, but also a case study that the strategy recovered as expected.” Seize the Investing Opportunities in DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF has a management fee of 0.85%. | e382de30-fca3-4e53-b0ed-32c782dc83d8 |
708712.0 | 2023-06-22 00:00:00 UTC | Unlocking ETF Strategies for Sustained Investment Success | DBMF | https://www.nasdaq.com/articles/unlocking-etf-strategies-for-sustained-investment-success | nan | nan | Amid the continued rally on Wall Street due to the artificial intelligence (AI) frenzy, short sellers have ramped up bets against U.S. stocks. This is especially true as total U.S. short interest, or the amount that traders have spent betting against U.S. equities, exceeded $1 trillion this month, reaching the highest since April 2022. The activity signals a divergence in market sentiment, with a section of traders betting on a potential market downturn.
The increase in short bets came despite the fact that short sellers betting against the U.S. stock market have lost about $120 billion so far this year, per the WSJ. Notably, short selling is a strategy in which investors borrow a stock to sell with the expectation of buying it back at a lower price. Traders engage in short selling when they expect a company's stock price to decline, and want to make money if that happens.
Will the Rally Continue?
The U.S. stock market has been powered by the rise of AI technology, with the S&P 500 and the tech-heavy Nasdaq Composite index growing 15.3% and 29%, respectively, so far this year. Hopes that the Fed is nearing the end of its interest rate-hike cycle have helped the S&P 500 to recover from the lows seen in October last year. Easing inflation and stronger-than-expected corporate earnings added to the strength (read: 5 Stocks That Powered a Historic May for Nasdaq ETF).
However, a number of strategists and analysts predict that the rally might fizzle due to a combination of factors. Goldman mentioned that bullish options look crowded, indicating a potential overbought condition. It also noted that the rally has been narrow, which can be a sign of a less robust market as it means that fewer stocks are driving the uptrend.
As the big tech companies have largely driven the market rally this year, most of the stocks have become overvalued, creating an unsustainable bubble that could burst and result in sharp price declines. At its congressional testimony, Federal Reserve Chairman Jerome Powell reinforced the central bank's objective to rein in inflation and hinted at the likelihood of further interest rate hikes. He stated that the fight to lower inflation still has a "long way" to go. As the tech sector relies on borrowing for superior growth, it is expensive to borrow more money for further initiatives when interest rates are high.
Additionally, the stock market has priced in overly optimistic growth expectations, indicating that the market may be vulnerable to disappointments if those expectations are not met.
Goldman still sees a base case of the S&P 500 rising to 4,500 by year-end, suggesting they believe the market can continue to rise despite the potential risks. Still, they see a 23% downside to stocks in a recession scenario, highlighting the potential risks and volatility in the market (read: 5 Best Performing ETFs of the New Bull Market).
Given these factors, it may be prudent for investors to consider strategies for hedging their exposure to the S&P 500. This could involve a range of techniques, from using options contracts to protect against downside risk, to diversifying into other asset classes, or even taking a more defensive posture in their equity portfolios.
Low-Volatility Focus
Investing in low-volatility stocks can help reduce the overall risk in the portfolio. Low-volatility stocks tend to exhibit smaller price fluctuations and have more stable returns compared to the broader market. ETFs like iShares Edge MSCI Min Vol USA ETF USMV and Invesco S&P 500 Low Volatility ETF SPLV that focus on low-volatility stocks can provide an easy way to implement this strategy. These have a Zacks ETF Rank #3 (Hold).
Hedge Volatility
Volatility-hedged ETFs are investment products designed to mitigate the impact of market volatility on a portfolio. These ETFs typically aim to provide investors with exposure to a particular asset class or market while reducing the impact of price fluctuations resulting from market volatility. The basic premise behind volatility-hedged ETFs is to combine a long position in an underlying asset or market with a short position in volatility futures or options contracts. By shorting volatility, these ETFs attempt to offset or "hedge" the potential losses that may occur during periods of heightened market volatility.
iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF looks exciting.
Value Addition
Value investing is an investment strategy that focuses on purchasing stocks that are undervalued relative to their intrinsic value. Value stocks seek to capitalize on the inefficiencies in the market and have the potential to deliver higher returns with lower volatility compared with their growth and blend counterparts. These are less susceptible to the trending markets and their dividend payouts offer safety in times of market turbulence (read: Value ETF Investing to Shine as a Slowdown Looms Large).
Given this, Vanguard Value ETF VTV, iShares Russell 1000 Value ETF IWD, Vanguard Mega Cap Value ETF MGV and Schwab U.S. Large-Cap Value ETF SCHV, having a Zacks ETF Rank #1 (Strong Buy) could be excellent picks.
Quality Bet
Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility, elevated margins, and a track of stable or rising sales and earnings growth. These products thus reduce volatility when compared to plain vanilla funds and hold up rather well during market swings. Further, academic research shows that high-quality companies consistently deliver superior risk-adjusted returns than the broader market over the long term. Among the most popular quality ETFs are iShares Edge MSCI USA Quality Factor ETF QUAL and Invesco S&P 500 Quality ETF SPHQ.
Diversification
Investors should diversify their portfolios across various asset classes and sectors. This helps in spreading out risk and reduces the impact of underperformance in any single investment. Diversification can be done in various ways like investing in multi-assets, a variety of sectors, different countries or regions, a wide range of market caps, investment styles and many others.
In this regard, multi-asset ETFs like iShares Core Growth Allocation ETF AOR and iShares Core Aggressive Allocation ETF AOA, and long-short ETFs like Global X S&P 500 Covered Call ETF XYLD and First Trust Long/Short Equity ETF FTLS could be good options. Multi-asset ETFs offer huge diversification benefits by investing across different asset classes, which have low correlations, thereby reducing overall volatility. These aim to provide a high level of current income with stability and potential for long-term appreciation while avoiding the downside risk of a specific asset class.
Meanwhile, a long/short strategy takes the best of both bull and bear predictions by involving buying and short selling of equities at the same time. This strategy is primarily used by hedge funds and involves taking long positions (buy) in stocks that are expected to increase in value while short positions (short sell) in stocks that are expected to decrease in value.
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First Trust Long/Short Equity ETF (FTLS): ETF Research Reports
Vanguard Value ETF (VTV): ETF Research Reports
Schwab U.S. Large-Cap Value ETF (SCHV): ETF Research Reports
iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports
Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports
iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
iShares Core Growth Allocation ETF (AOR): ETF Research Reports
Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
iShares Core Aggressive Allocation ETF (AOA): ETF Research Reports
Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports
Vanguard Mega Cap Value ETF (MGV): ETF Research Reports
First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports
iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports
Global X S&P 500 Covered Call ETF (XYLD): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF looks exciting. Click to get this free report First Trust Long/Short Equity ETF (FTLS): ETF Research Reports Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Large-Cap Value ETF (SCHV): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports iShares Core Growth Allocation ETF (AOR): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares Core Aggressive Allocation ETF (AOA): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports Vanguard Mega Cap Value ETF (MGV): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports Global X S&P 500 Covered Call ETF (XYLD): ETF Research Reports To read this article on Zacks.com click here. As the big tech companies have largely driven the market rally this year, most of the stocks have become overvalued, creating an unsustainable bubble that could burst and result in sharp price declines. | iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF looks exciting. Click to get this free report First Trust Long/Short Equity ETF (FTLS): ETF Research Reports Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Large-Cap Value ETF (SCHV): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports iShares Core Growth Allocation ETF (AOR): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares Core Aggressive Allocation ETF (AOA): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports Vanguard Mega Cap Value ETF (MGV): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports Global X S&P 500 Covered Call ETF (XYLD): ETF Research Reports To read this article on Zacks.com click here. In this regard, multi-asset ETFs like iShares Core Growth Allocation ETF AOR and iShares Core Aggressive Allocation ETF AOA, and long-short ETFs like Global X S&P 500 Covered Call ETF XYLD and First Trust Long/Short Equity ETF FTLS could be good options. | Click to get this free report First Trust Long/Short Equity ETF (FTLS): ETF Research Reports Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Large-Cap Value ETF (SCHV): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports iShares Core Growth Allocation ETF (AOR): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares Core Aggressive Allocation ETF (AOA): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports Vanguard Mega Cap Value ETF (MGV): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports Global X S&P 500 Covered Call ETF (XYLD): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF looks exciting. Given this, Vanguard Value ETF VTV, iShares Russell 1000 Value ETF IWD, Vanguard Mega Cap Value ETF MGV and Schwab U.S. Large-Cap Value ETF SCHV, having a Zacks ETF Rank #1 (Strong Buy) could be excellent picks. | iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF looks exciting. Click to get this free report First Trust Long/Short Equity ETF (FTLS): ETF Research Reports Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Large-Cap Value ETF (SCHV): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports iShares Core Growth Allocation ETF (AOR): ETF Research Reports Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports iShares Core Aggressive Allocation ETF (AOA): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports Vanguard Mega Cap Value ETF (MGV): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports Global X S&P 500 Covered Call ETF (XYLD): ETF Research Reports To read this article on Zacks.com click here. Notably, short selling is a strategy in which investors borrow a stock to sell with the expectation of buying it back at a lower price. | 8642d604-7899-492f-a02f-a48fa1903804 |
708713.0 | 2023-06-16 00:00:00 UTC | Andrew Beer: 2023 Is the Year of the One Trade Market | DBMF | https://www.nasdaq.com/articles/andrew-beer%3A-2023-is-the-year-of-the-one-trade-market | nan | nan | This year continues to be full of surprises for markets as equities proved resilient and bond yields soared. However, it’s all part of a larger global macro trend, in which the narrative remains centered around U.S. Fed tightening. 2023 is the year of the “one trade market,” according to Andrew Beer, where prolonged uncertainty presents ongoing challenges and volatility.
In a global environment dominated by Fed tightening and FOMC meeting outcomes, investor uncertainty remains pronounced. Markets have proven unable to reliably predict the Fed's path this tightening cycle, creating sharp swings in market performance every few months.
“One month, everyone thinks we’ve hit peak rates, and this reverberates across asset classes,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and co-founder of Dynamic Beta investments, explained in a video detailing DBMF’s May performance. “The next month, we’re back to sticky inflation and the ripple effects start all over.”
2023 and One Trade Market Challenges
The overarching uncertainty creates significant challenge for trend-following strategies in particular. Beer noted that at the end of March, investors were predicting recession within weeks, which hasn’t manifested.
Although bank tightening is on the horizon, regional banks continue lending for now. An earnings season comprised of expectation beats sent equities higher, and profits continue to prove resilient. The geopolitical arena, although tense, hasn’t deteriorated significantly this year.
“Price moves, not fundamentals, keep driving the market narrative,” Beer said.
The constant shifting tides create challenges for trend-following strategies like managed futures. This quarter in particular remains dominated by a lack of any singular trend emerging in the wake of the regional banking collapse mid-March.
[caption id="attachment_523137" align="aligncenter" width="609"] Diversification proved to hinder performance in 2023, an effect of the "one trade market"[/caption]
Image source: Dynamic Beta investments
A Guide to DBMF Positioning in May
Dynamic Beta investments predicts that global markets “will break in one direction at some point soon, which should produce durable trends across the major markets we trade.”
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees.
The fund is currently positioned in a manner that could allow it to capture gains for several potential trends. DBMF maintains a long position in gold, a beneficial position if high inflation persists. It’s also short on oil, a potential hedge should recession strike, and short on the two-year Treasury.
“Equity positioning keeps moving around -- not surprisingly, given the market gyrations,” Beer explained. The fund is also significantly short on the Japanese yen, a position that paid off in 2022.
DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. It also takes short positions in derivatives with exposures expected to fall in value. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | [caption id="attachment_523137" align="aligncenter" width="609"] Diversification proved to hinder performance in 2023, an effect of the "one trade market"[/caption] Image source: Dynamic Beta investments A Guide to DBMF Positioning in May Dynamic Beta investments predicts that global markets “will break in one direction at some point soon, which should produce durable trends across the major markets we trade.” The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. “One month, everyone thinks we’ve hit peak rates, and this reverberates across asset classes,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and co-founder of Dynamic Beta investments, explained in a video detailing DBMF’s May performance. | “One month, everyone thinks we’ve hit peak rates, and this reverberates across asset classes,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and co-founder of Dynamic Beta investments, explained in a video detailing DBMF’s May performance. [caption id="attachment_523137" align="aligncenter" width="609"] Diversification proved to hinder performance in 2023, an effect of the "one trade market"[/caption] Image source: Dynamic Beta investments A Guide to DBMF Positioning in May Dynamic Beta investments predicts that global markets “will break in one direction at some point soon, which should produce durable trends across the major markets we trade.” The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. | “One month, everyone thinks we’ve hit peak rates, and this reverberates across asset classes,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and co-founder of Dynamic Beta investments, explained in a video detailing DBMF’s May performance. [caption id="attachment_523137" align="aligncenter" width="609"] Diversification proved to hinder performance in 2023, an effect of the "one trade market"[/caption] Image source: Dynamic Beta investments A Guide to DBMF Positioning in May Dynamic Beta investments predicts that global markets “will break in one direction at some point soon, which should produce durable trends across the major markets we trade.” The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | “One month, everyone thinks we’ve hit peak rates, and this reverberates across asset classes,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and co-founder of Dynamic Beta investments, explained in a video detailing DBMF’s May performance. [caption id="attachment_523137" align="aligncenter" width="609"] Diversification proved to hinder performance in 2023, an effect of the "one trade market"[/caption] Image source: Dynamic Beta investments A Guide to DBMF Positioning in May Dynamic Beta investments predicts that global markets “will break in one direction at some point soon, which should produce durable trends across the major markets we trade.” The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. | cc00f422-6ea1-4e79-b921-06add057d2e1 |
708714.0 | 2023-06-12 00:00:00 UTC | An Advisor’s Guide to Managed Futures Strategies | DBMF | https://www.nasdaq.com/articles/an-advisors-guide-to-managed-futures-strategies | nan | nan | It's been a challenging year for many managed futures strategies but they continue to offer long-term potential for portfolios. The benefits of trend-following strategies are numerous and worth consideration for inclusion in any alternatives sleeve.
Trend following doesn’t invest based on the forward-looking price-to-earnings of a company or on any of the traditional metrics by which companies are measured. Instead, it invests in what is currently happening in markets and how asset classes are trading.
Benefits of Managed Futures
Managed futures strategies remove the perception of how an asset might perform from the equation. They are entirely data-driven strategies based on how an asset is currently performing. Specialized analysts (quants) use a variety of models and equations to anticipate how an asset or class of assets is most likely to trend based on an asset’s current performance.
These types of strategies are antithetical to traditional “buy and hold” strategies because they trade constantly. Trend-following funds continuously alter their allocations, taking long or short positions on any number of assets.
One of the greatest strengths of managed futures is the ability to go short on an asset close. Equity indexes and bonds all only allow for long allocations or the belief that the investment will do well over time. Futures allow assets to be shorted if an investor believes they will underperform, thus allowing a profit to be made on the underperformance.
Another core benefit to managed futures strategies is the diversification potential they provide portfolios. Managed futures offer low and sometimes negative correlations to equities and bonds. They provide the potential of a diversified income stream for investors and act as a sort of longer-term insurance policy for a portfolio. This is due largely to their performance potential during market dislocations and regime shifts when equities and/or bonds underperform.
See also: "A Historical Look at Managed Futures Returns and Performance"
Managed Futures Strategies Invest in Market Movements
Managed futures strategies capture disconnects between investor sentiment and actual market movement. They historically perform well during market drawdowns and dislocations, earning the moniker of “crisis alpha”.
Often investors can be somewhat slower to respond to market changes. They are more likely to hold onto positions that might not serve them best in the current environment in the hopes that there will be a return to the previous market circumstances that benefited those positions.
Managed futures funds largely outperformed last year as market regimes shifted, but many managed futures strategies face challenges this year. Investors — and markets — remain uncertain as to the path of the economy, the Fed, and any number of other potential risk factors. In an environment of steep uncertainty, no clear trends have emerged in the wake of the regional bank collapse in mid-March.
Invest in Managed Futures Long-Term With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. This “fee alpha” potential allows for greater return capture potential compared to hedge funds that often carry significant fees.
Image source: Dynamic Beta investments
It is an actively managed fund that uses long and short positions within derivatives (mostly futures contracts) and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. It also takes short positions in derivatives with exposures expected to fall in value. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. Invest in Managed Futures Long-Term With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. | Invest in Managed Futures Long-Term With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. | Invest in Managed Futures Long-Term With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. | Invest in Managed Futures Long-Term With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) seeks to capture the average return of the 20 largest managed futures hedge funds. By offering the strategy within the cost-efficient ETF wrapper, DBMF seeks to provide similar performance with significantly reduced management fees. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. | 24826d7e-47d7-4c7c-9dd8-2527fc80311e |
708715.0 | 2023-06-08 00:00:00 UTC | Worried About Concentration Risk? Consider Managed Futures | DBMF | https://www.nasdaq.com/articles/worried-about-concentration-risk-consider-managed-futures | nan | nan | The S&P 500 hit bull market territory this week from October lows, carried by a small number of mega-cap companies. Investors with an eye toward the concentration risk within broad equity exposure should consider managed futures for their low correlations to stocks and bonds.
Many of the strongest-performing companies this year are tech companies. The S&P 500 information technology sector is up 34.28% YTD. Meanwhile, the financial and energy sector continue to drag on broad S&P 500 performance, down 3.56% and 7.13% respectively YTD.
Technology companies rely heavily on forward earnings estimates and are historically more sensitive to forecast downturns and periods of market stress. They have defied many investors' expectations this year and continue to be some of the most crowded trades of the year.
Beyond the risk to companies reliant on forward earnings should the economic outlook definitively turn for the worse is the concentration risk of the S&P 500. Just five companies — Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), and Alphabet (GOOGL) — make up 20% of the index’s weight as of 06/07/2023.
The concentration risk is most apparent when comparing the SPDR S&P 500 ETF Trust (SPY) and the Invesco S&P 500 Equal Weight ETF (RSP). SPY is up 12.19% while RSP, which weights all sectors evenly, is up just 2.89%.
See also: “Is Your Portfolio Positioned for Economic Weakening?”
Diversify Away from Equity Concentration Risk With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification 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. These include domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
Image source: LOGICLY
As demonstrated in the chart above, DBMF maintains low correlations to equities. The fund offers extremely low correlations to the Dow Jones Industrial Average, the S&P 500, and the Russell 2000. In addition, DBMF maintains low correlations to the Nasdaq. (Correlations calculated using weekly returns calculated back a maximum of three years.)
The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This analyzes the trailing 60-day performance of CTA hedge funds, then determines a portfolio of liquid contracts to mimic the hedge funds’ averaged performance (not the positions).
DBMF is currently down 7.90% YTD as of June 7, 2023, presenting a buying opportunity for those seeking long-term diversification.
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. It 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.
Visualizations and data provided by LOGICLY, which is a wholly owned subsidiary of VettaFi.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | See also: “Is Your Portfolio Positioned for Economic Weakening?” Diversify Away from Equity Concentration Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. Image source: LOGICLY As demonstrated in the chart above, DBMF maintains low correlations to equities. In addition, DBMF maintains low correlations to the Nasdaq. | See also: “Is Your Portfolio Positioned for Economic Weakening?” Diversify Away from Equity Concentration Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. Image source: LOGICLY As demonstrated in the chart above, DBMF maintains low correlations to equities. | See also: “Is Your Portfolio Positioned for Economic Weakening?” Diversify Away from Equity Concentration Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. Image source: LOGICLY As demonstrated in the chart above, DBMF maintains low correlations to equities. | See also: “Is Your Portfolio Positioned for Economic Weakening?” Diversify Away from Equity Concentration Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. In addition, DBMF maintains low correlations to the Nasdaq. Image source: LOGICLY As demonstrated in the chart above, DBMF maintains low correlations to equities. | a018710c-4d49-4faf-998b-4837e0022991 |
708716.0 | 2023-06-02 00:00:00 UTC | As Gold Shines in 2023, DBMF Captures Changing Trend | DBMF | https://www.nasdaq.com/articles/as-gold-shines-in-2023-dbmf-captures-changing-trend | nan | nan | It’s been a relatively good year for gold prices after months of falling prices in the latter half of 2022. Investors continue to buy into gold during peak market stresses, a trend that the iMGP DBi Managed Futures Strategy ETF (DBMF) captures.
Money poured into the major gold ETFs in the first five months of this year. A staple gold ETF, the SPDR Gold Shares (GLD), is up $1.7 billion in net flows year-to-date. Overall, gold ETFs have roughly a combined $5 billion in net flows YTD, and managed futures strategies shifted to capture the trend.
Gold has historically been used as an inflation hedge within portfolios, as well as a diversifier. Prices typically spike during times of extreme market stress and investor fear.
See more: “Bull vs. Bear: When Investing in Gold ETFs, Find What Glitters”
Gold prices rose dramatically in the wake of regional bank failures in March as investors fled to familiar safe havens. GLD is up 8.31% YTD, and gold continuous contract futures are up 8.05% YTD.
Where gold capitalized on bank failures and investor fear, managed futures strategies struggled. The abrupt reversal of the inflation trade that dominated 2022 caught many managed futures funds on the wrong footing. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) declined sharply in the wake of March’s bank failures, but this has since largely leveled.
DBMF Captures the 2023 Gold Trend
The sharp rising prices of gold and its popularity since mid-March mean that many managed futures strategies, including DBMF, are currently long on gold.
DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. The actively managed fund uses long and short positions within the futures market on several asset classes. These include 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. The DBE analyzes the trailing 60-day performance of CTA hedge funds. It then determines a portfolio of liquid contracts that would mimic the hedge funds’ averaged performance (not positions).
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. The fund also takes short positions in derivatives with exposures expected to fall in value.
Image source: iMGP Funds
Currently, the managed futures ETF is long on gold, the one-year Treasury Bill, the 10-year Treasury Note, the euro, and MSCI EAFE. The fund is short on the yen, 30-day Fed Funds, MSCI emerging markets, crude oil, the two-year Treasury Note, and more.
See more: "Capture Second Half Trends With Managed Futures”
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investors continue to buy into gold during peak market stresses, a trend that the iMGP DBi Managed Futures Strategy ETF (DBMF) captures. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) declined sharply in the wake of March’s bank failures, but this has since largely leveled. DBMF Captures the 2023 Gold Trend The sharp rising prices of gold and its popularity since mid-March mean that many managed futures strategies, including DBMF, are currently long on gold. | Investors continue to buy into gold during peak market stresses, a trend that the iMGP DBi Managed Futures Strategy ETF (DBMF) captures. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) declined sharply in the wake of March’s bank failures, but this has since largely leveled. DBMF Captures the 2023 Gold Trend The sharp rising prices of gold and its popularity since mid-March mean that many managed futures strategies, including DBMF, are currently long on gold. | Investors continue to buy into gold during peak market stresses, a trend that the iMGP DBi Managed Futures Strategy ETF (DBMF) captures. DBMF Captures the 2023 Gold Trend The sharp rising prices of gold and its popularity since mid-March mean that many managed futures strategies, including DBMF, are currently long on gold. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) declined sharply in the wake of March’s bank failures, but this has since largely leveled. | Investors continue to buy into gold during peak market stresses, a trend that the iMGP DBi Managed Futures Strategy ETF (DBMF) captures. Funds like the iMGP DBi Managed Futures Strategy ETF (DBMF) declined sharply in the wake of March’s bank failures, but this has since largely leveled. DBMF Captures the 2023 Gold Trend The sharp rising prices of gold and its popularity since mid-March mean that many managed futures strategies, including DBMF, are currently long on gold. | ac3db97a-389b-4986-81ef-6002222b2249 |
708717.0 | 2023-05-30 00:00:00 UTC | Managed Futures ETF DBMF Finds Footing in May | DBMF | https://www.nasdaq.com/articles/managed-futures-etf-dbmf-finds-footing-in-may | nan | nan | Aside from Nvidia’s monumental gains in recent days, markets remain tense and relatively flat as investors await a debt ceiling resolution. Continued volatility from various market stressors creates ongoing challenges for trend followers. However, the 2022 managed futures ETF star iMGP DBi Managed Futures Strategy ETF (DBMF) seems to have found its footing after abrupt trend reversals in March.
Banking sector stress in March led to investor uncertainty in bonds, debt ceiling stress in May weighs on short-term Treasuries, and second half recession odds loom over equities. The abrupt reversal of the inflation trade in March that sustained the fund for the last year led to a sharp decline. DBMF has regained some of its price performance since March and demonstrated positive gains in May.
Though the fund is down 7.80% year-to-date, in the last month it had positive price performance at 0.90% as of 05/30. Persistent volatility and a confluence of opposing market stressors continue to create challenges for trend-based strategies. Despite short-term volatility, managed futures still offer significant returns and performance long-term.
See also: “A Historical Look at Managed Futures Returns and Performance”
Invest in Long-Term Trends With This Managed Futures ETF
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. The actively managed fund uses long and short positions within the futures market on several asset classes. These include 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. The DBE analyzes the trailing 60-day performance of CTA hedge funds. It then determines a portfolio of liquid contracts that would mimic the hedge funds’ averaged performance (not positions).
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. The fund also takes short positions in derivatives with exposures expected to fall in value.
Currently the managed futures ETF is long the 1 Year Treasury Bill, the 10 Year Treasury Note, and the 10 Year Ultra futures. DBMF is also long the MSCI EAFE and gold. The fund is short the yen, 30-day Fed Funds, MSCI emerging markets, crude oil, the 2 Year Treasury Note, and more.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. However, the 2022 managed futures ETF star iMGP DBi Managed Futures Strategy ETF (DBMF) seems to have found its footing after abrupt trend reversals in March. DBMF has regained some of its price performance since March and demonstrated positive gains in May. | However, the 2022 managed futures ETF star iMGP DBi Managed Futures Strategy ETF (DBMF) seems to have found its footing after abrupt trend reversals in March. See also: “A Historical Look at Managed Futures Returns and Performance” Invest in Long-Term Trends With This Managed Futures ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. | However, the 2022 managed futures ETF star iMGP DBi Managed Futures Strategy ETF (DBMF) seems to have found its footing after abrupt trend reversals in March. See also: “A Historical Look at Managed Futures Returns and Performance” Invest in Long-Term Trends With This Managed Futures ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF has regained some of its price performance since March and demonstrated positive gains in May. | See also: “A Historical Look at Managed Futures Returns and Performance” Invest in Long-Term Trends With This Managed Futures ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. However, the 2022 managed futures ETF star iMGP DBi Managed Futures Strategy ETF (DBMF) seems to have found its footing after abrupt trend reversals in March. DBMF has regained some of its price performance since March and demonstrated positive gains in May. | 5d038f19-8bf2-4529-99bf-5f3c274c1c7e |
708718.0 | 2023-05-25 00:00:00 UTC | Capture Second Half Trends With Managed Futures | DBMF | https://www.nasdaq.com/articles/capture-second-half-trends-with-managed-futures | nan | nan | Debt ceiling turmoil is likely to draw to a close soon, leaving investors to focus on second-half positioning and trends. For those looking to increase non-correlated returns amidst second-half economic challenges, the iMGP DBi Managed Futures Strategy ETF (DBMF) is a fund to consider.
Congress adjourned for its Memorial Day recess Thursday afternoon with no resolution on the debt ceiling. The S&P 500 and Nasdaq both popped on Nvidia’s record-setting single-day stock gains. However, other equity indexes closed down as uncertainty and market turmoil extend into the long weekend.
It’s the latest stress point in a string of market stressors this year that continue to keep investor uncertainty elevated. This uncertainty equates to market turmoil and prevents any emergent trends from forming in the wake of regional banking crashes.
Many managed futures strategies — that invest in how assets are trending versus their forecast performance — dropped in the wake of the regional banking collapse in March. DBMF is down 7.9% as of 05/25, dropping sharply in March but partially recovering in the weeks after.
See also: "A Historical Look at Managed Futures Returns and Performance"
Capture Emerging Second Half Trends With DBMF
As debt ceiling turmoil and banking sector concerns subside, managed futures strategies are poised to capture emerging trends in the second half. The dynamic nature of the inflation and rates picture means that many inflation-based trends that the strategy capitalized on last year evaporated this year.
The DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. The actively managed fund uses long and short positions within the futures market on several asset classes. These include 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. The DBE analyzes the trailing 60-day performance of CTA hedge funds. It then determines a portfolio of liquid contracts that would mimic the hedge funds’ averaged performance (not positions).
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. The fund also 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For those looking to increase non-correlated returns amidst second-half economic challenges, the iMGP DBi Managed Futures Strategy ETF (DBMF) is a fund to consider. DBMF is down 7.9% as of 05/25, dropping sharply in March but partially recovering in the weeks after. See also: "A Historical Look at Managed Futures Returns and Performance" Capture Emerging Second Half Trends With DBMF As debt ceiling turmoil and banking sector concerns subside, managed futures strategies are poised to capture emerging trends in the second half. | See also: "A Historical Look at Managed Futures Returns and Performance" Capture Emerging Second Half Trends With DBMF As debt ceiling turmoil and banking sector concerns subside, managed futures strategies are poised to capture emerging trends in the second half. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. For those looking to increase non-correlated returns amidst second-half economic challenges, the iMGP DBi Managed Futures Strategy ETF (DBMF) is a fund to consider. | See also: "A Historical Look at Managed Futures Returns and Performance" Capture Emerging Second Half Trends With DBMF As debt ceiling turmoil and banking sector concerns subside, managed futures strategies are poised to capture emerging trends in the second half. For those looking to increase non-correlated returns amidst second-half economic challenges, the iMGP DBi Managed Futures Strategy ETF (DBMF) is a fund to consider. DBMF is down 7.9% as of 05/25, dropping sharply in March but partially recovering in the weeks after. | See also: "A Historical Look at Managed Futures Returns and Performance" Capture Emerging Second Half Trends With DBMF As debt ceiling turmoil and banking sector concerns subside, managed futures strategies are poised to capture emerging trends in the second half. For those looking to increase non-correlated returns amidst second-half economic challenges, the iMGP DBi Managed Futures Strategy ETF (DBMF) is a fund to consider. DBMF is down 7.9% as of 05/25, dropping sharply in March but partially recovering in the weeks after. | 3f95fd9c-28c0-4d73-b8e9-0b0d5d192197 |
708719.0 | 2023-05-24 00:00:00 UTC | As Market Tension Persists, Consider Managed Futures | DBMF | https://www.nasdaq.com/articles/as-market-tension-persists-consider-managed-futures | nan | nan | The S&P 500 and Nasdaq both closed down 1% in trading Tuesday as debt ceiling talks continued. For investors looking for price opportunity and trend capture as the economy slows, look to the iMGP DBi Managed Futures Strategy ETF (DBMF).
Negotiations for a resolution to the debt ceiling by June 1 continue to drag on in Washington. Yields in the 10-year and 30-year Treasury continue to climb while sectors like consumer staples, utilities, and energy fall.
“Rates have continued to show some life over the last few weeks,” Chris Veronne, head of technical and macro research at Strategas Securities, told CNBC. “With upward pressure on yields has come downward pressure to Staples and Utilities both of which traded to multi month relative performance lows.”
The volatility and shifting of sectors and rising and falling Treasury yields reflect wider investor and market uncertainty. No clear trends have emerged, and concerns of the debt ceiling have thrown markets into a relative holding pattern for the time being.
Looking ahead to the second half of the year, economic slowing and recession are likely to drive prolonged trends. Managed futures strategies remain positioned to capture any emerging trends, but for now prolonged uncertainty remains a challenge. It also creates an opportunity to capture the strategy at attractive prices.
Capitalize on Price Opportunities in Managed Futures
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. The actively managed fund uses long and short positions within the futures market on several asset classes. These include domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
DBMF is currently down 8.14% YTD and is above its 50-day simple moving average (SMA) but remains below its 200-day SMA.
The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. The DBE analyzes the trailing 60-day performance of CTA hedge funds. It then determines a portfolio of liquid contracts that would mimic the hedge funds’ averaged performance (not positions).
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets that are anticipated to grow in value. The fund also 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For investors looking for price opportunity and trend capture as the economy slows, look to the iMGP DBi Managed Futures Strategy ETF (DBMF). Capitalize on Price Opportunities in Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down 8.14% YTD and is above its 50-day simple moving average (SMA) but remains below its 200-day SMA. | For investors looking for price opportunity and trend capture as the economy slows, look to the iMGP DBi Managed Futures Strategy ETF (DBMF). Capitalize on Price Opportunities in Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down 8.14% YTD and is above its 50-day simple moving average (SMA) but remains below its 200-day SMA. | For investors looking for price opportunity and trend capture as the economy slows, look to the iMGP DBi Managed Futures Strategy ETF (DBMF). Capitalize on Price Opportunities in Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down 8.14% YTD and is above its 50-day simple moving average (SMA) but remains below its 200-day SMA. | For investors looking for price opportunity and trend capture as the economy slows, look to the iMGP DBi Managed Futures Strategy ETF (DBMF). Capitalize on Price Opportunities in Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down 8.14% YTD and is above its 50-day simple moving average (SMA) but remains below its 200-day SMA. | 8cacdd32-7168-49a9-9b45-656262b8003c |
708720.0 | 2023-05-22 00:00:00 UTC | DBMF Offers “Index-Plus” Performance in ETF Wrapper | DBMF | https://www.nasdaq.com/articles/dbmf-offers-index-plus-performance-in-etf-wrapper | nan | nan | It’s been a rocky year for managed futures performance after strong outperformance in 2022. Despite temporary setbacks in changing trends, the strategy still offers a number of potential benefits to portfolios long-term. The iMGP DBi Managed Futures Strategy ETF (DBMF) is worth consideration for its performance and “index-plus” approach to managed futures investing.
Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF, walked through the fund’s performance in a recent video. His detailed analysis of managed futures performance and historic returns was covered previously here.
Capturing Hedge Fund Performance in an ETF
DBMF falls into the bucket of hedge fund replication strategies that more ETFs have been offering. The fund seeks to replicate the average performance — not positions — of the largest managed futures hedge funds.
Beer refers to the approach as “index-plus” or “index-lite” within managed futures.
“When we looked at the returns of the strategy, it was reported after all fees and expenses,” Beer said of the hedge funds. “And those fees and expenses are… drumroll… a lot. Maybe 500 basis points a year on average.”
Image source: Dynamic Beta investments
Since inception in 2019, DBMF has maintained a correlation of 0.89 to the SC CTA Index comprised of managed futures hedge funds. It also maintains a 0.90 correlation to the Morningstar US Fund Systematic Trend Index of mutual funds.
“This is the idea of ‘index-plus,’” Beer explained. An investor can receive “‘index-like’ diversification by targeting the average positions of lots of funds.”
The fee alpha of the fund from reduced expenses and fees that ETFs inherently carry generates the "plus" portion of "index-plus."
DBMF also has yielded significant outperformance since inception. DBMF’s performance is nearly double that of the average managed futures mutual fund on a cumulative basis.
See more: “Under the Hood of DBMF: April Performance”
Invest in "Index-Plus" Opportunities With DBMF
The iMGP DBi Managed Futures Strategy ETF (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. Positions on asset classes include: domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The Dynamic Beta Engine determines the fund’s position within domestically managed futures and forward contracts. DBE analyzes the trailing 60-day performance of CTA hedge funds. It 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 likely to grow in value. It also 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF, walked through the fund’s performance in a recent video. Maybe 500 basis points a year on average.” Image source: Dynamic Beta investments Since inception in 2019, DBMF has maintained a correlation of 0.89 to the SC CTA Index comprised of managed futures hedge funds. The iMGP DBi Managed Futures Strategy ETF (DBMF) is worth consideration for its performance and “index-plus” approach to managed futures investing. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is worth consideration for its performance and “index-plus” approach to managed futures investing. See more: “Under the Hood of DBMF: April Performance” Invest in "Index-Plus" Opportunities With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets likely to grow in value. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is worth consideration for its performance and “index-plus” approach to managed futures investing. See more: “Under the Hood of DBMF: April Performance” Invest in "Index-Plus" Opportunities With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. Andrew Beer, co-founder of Dynamic Beta investments and co-PM of DBMF, walked through the fund’s performance in a recent video. | Capturing Hedge Fund Performance in an ETF DBMF falls into the bucket of hedge fund replication strategies that more ETFs have been offering. Maybe 500 basis points a year on average.” Image source: Dynamic Beta investments Since inception in 2019, DBMF has maintained a correlation of 0.89 to the SC CTA Index comprised of managed futures hedge funds. The iMGP DBi Managed Futures Strategy ETF (DBMF) is worth consideration for its performance and “index-plus” approach to managed futures investing. | 9d8ac667-eb3d-439c-b728-ebb3d930b81f |
708721.0 | 2023-05-22 00:00:00 UTC | ETFs to Hedge Volatility Amid Debt Default Worries | DBMF | https://www.nasdaq.com/articles/etfs-to-hedge-volatility-amid-debt-default-worries | nan | nan | Volatility is lately on the rise amid debt default worries. This is especially true as the second meeting between White House and Republican congressional negotiators has ended up with no progress on raising the federal government's $31.4 trillion debt ceiling. And a deadline to raise the borrowing cap is fast approaching.
A default on its debt would likely mean a recession for the U.S. economy. In such a scenario, investors should apply some hedging techniques to their equity portfolio to reduce the overall volatility or protect against significant market downturns. While there are a number of ways to do this, volatility-hedged ETFs seem compelling choices. Some of these include Global X Russell 2000 Covered Call ETF RYLD, iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF.
Investors should note that these funds have the potential to stand out and outperform simple vanilla funds in case of rising volatility.
What Are Volatility Hedged ETFs?
Volatility hedged ETFs are investment products designed to mitigate the impact of market volatility on a portfolio. These ETFs typically aim to provide investors with exposure to a particular asset class or market while reducing the impact of price fluctuations resulting from market volatility (read: Tech ETFs Roaring to New 52-Week Highs).
The basic premise behind volatility-hedged ETFs is to combine a long position in an underlying asset or market with a short position in volatility futures or options contracts. By shorting volatility, these ETFs attempt to offset or "hedge" the potential losses that may occur during periods of heightened market volatility.
These ETFs are often structured to provide targeted exposure to specific markets, such as equities or fixed income, while attempting to reduce the impact of volatility on returns. They may employ various strategies and techniques, including options, futures contracts, and other derivatives, to achieve their objective.
However, these ETFs may not always provide complete protection during extreme market events, and they may have additional costs associated with their hedging strategies.
Debt Ceiling Talks Fail
Over the weekend, House Speaker Kevin McCarthy accused White House officials of backpedaling in negotiations on raising the debt ceiling and setting federal spending levels. The U.S. government is nearing the Jun 1 deadline, when the government could run out of cash to pay its bills, unless Congress allows it to borrow more (read: Wall Street On the Brink of Rally? Momentum ETFs to Tap).
U.S. President Joe Biden on Sunday called the latest Republican offer on lifting the debt ceiling “unacceptable." Republicans said they would not approve an increase in the federal government's borrowing limit without agreement on sharp spending cuts.
ETFs in Focus
Global X Russell 2000 Covered Call ETF (RYLD)
Global X Russell 2000 Covered Call ETF seeks to generate income through covered call writing, which historically produces higher yields in periods of volatility. It follows a “covered call” or “buy-write” strategy, in which the fund buys the stocks in the Russell 2000 Index (at times by exposure to the Vanguard Russell 2000 ETF), and “writes” or “sells” corresponding call options on the Russell 2000 Index.
Global X Russell 2000 Covered Call ETF has AUM of $1.4 billion and trades in an average daily volume of 1.4 million shares. The ETF charges 60 bps in fees per year.
iMGP DBi Managed Futures Strategy ETF (DBMF)
iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. It will employ long and short positions in derivatives, primarily futures contracts and forward contracts, across the broad asset classes of equities, fixed income, currencies and commodities.
iMGP DBi Managed Futures Strategy ETF has AUM of $708.5 million and charges 85 bps in annual fees. It trades in a moderate volume of 425,000 shares a day on average.
Aptus Drawdown Managed Equity ETF (ADME)
Aptus Drawdown Managed Equity ETF seeks capital appreciation with a focus on managing drawdown risk through hedges. The strategy typically selects 50-75 large U.S. companies based on a Yield plus Growth framework, tilting holdings to favor companies with solid fundamentals and reasonable valuations while avoiding those with negative price momentum. It has an added objective of capital protection through the use of equity and index options to reduce drawdown when U.S. equity markets are falling.
Aptus Drawdown Managed Equity ETF charges 79 bps in annual fees and has accumulated $195.2 million in its asset base. It trades in an average daily volume of 44,000 shares.
Invesco S&P 500 Downside Hedged ETF (PHDG)
Invesco S&P 500 Downside Hedged ETF is an actively managed fund that seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. Invesco S&P 500 Downside Hedged ETF tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The index allows investors to receive exposure to the equity and volatility of the S&P 500 Index in a dynamic framework (read: Don't "Sell in May And Go Away," Consider 5 ETF Strategies).
Invesco S&P 500 Downside Hedged ETF has accumulated $191.1 million in its asset base and charges 39 bps in fees per year from its investors. Volume is good, exchanging 44,000 shares a day on average.
First Trust Managed Futures Strategy Fund (FMF)
WisdomTree Managed Futures Strategy Fund seeks to achieve positive returns that are not directly correlated to broad market equity or fixed income returns by investing in a portfolio of exchange-listed futures.
First Trust Managed Futures Strategy Fund has accumulated $170.6 million and charges 95 bps in annual fees. It trades in a moderate volume of 46,000 shares a day on average.
Bottom Line
Investors can shield their portfolios against volatility with the help of the above-mentioned products. These provide dynamic exposure according to the level of market volatility and are least affected by any market turmoil. So, they could prove to be great choices when it comes to offering protection against market downturns.
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Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports
First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports
Global X Russell 2000 Covered Call ETF (RYLD): ETF Research Reports
iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Some of these include Global X Russell 2000 Covered Call ETF RYLD, iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF. iMGP DBi Managed Futures Strategy ETF (DBMF) Click to get this free report Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports Global X Russell 2000 Covered Call ETF (RYLD): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports To read this article on Zacks.com click here. | Some of these include Global X Russell 2000 Covered Call ETF RYLD, iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF. Click to get this free report Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports Global X Russell 2000 Covered Call ETF (RYLD): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF (DBMF) | Some of these include Global X Russell 2000 Covered Call ETF RYLD, iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF. Click to get this free report Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports Global X Russell 2000 Covered Call ETF (RYLD): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF (DBMF) | Some of these include Global X Russell 2000 Covered Call ETF RYLD, iMGP DBi Managed Futures Strategy ETF DBMF, Aptus Drawdown Managed Equity ETF ADME, Invesco S&P 500 Downside Hedged ETF PHDG and First Trust Managed Futures Strategy Fund FMF. iMGP DBi Managed Futures Strategy ETF (DBMF) Click to get this free report Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports Global X Russell 2000 Covered Call ETF (RYLD): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Aptus Drawdown Managed Equity ETF (ADME): ETF Research Reports To read this article on Zacks.com click here. | 1006032a-934c-496a-9c5e-d7103a4bf98a |
708722.0 | 2023-05-18 00:00:00 UTC | A Historical Look at Managed Futures Returns and Performance | DBMF | https://www.nasdaq.com/articles/a-historical-look-at-managed-futures-returns-and-performance | nan | nan | This year remains a challenging year for most asset classes and strategies, managed futures included. The strategy is a compelling one, however, when looking back at long-term historical performance, returns, and correlation.
Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of iMGP DBi Managed Futures Strategy ETF (DBMF) dove into historical performance in a recent video. Comparing the managed futures strategy against stocks and bonds reveals a compelling investment case.
To look back at long-term strategy performance, Beer used the SocGen CTA Hedge Fund Index from 2000 through April 2023. The index tracks the average performance of the 20 largest managed futures hedge funds.
Managed Futures Offer Competitive Returns
The findings revealed that managed futures offered returns that fell between bonds and equities over the last 23 years. What’s more, it provided these returns with markedly fewer maximum drawdowns.
Image source: Dynamic Beta investments
“The index of hedge funds has delivered returns between stocks and bonds, with roughly zero correlation to each,” Beer explained. It has also “tended to perform best during prolonged market crises.”
It’s this performance during crises that often catches advisor and investor attention. Managed futures invest in how asset classes are actually trending compared to forward-looking forecasts. In times of market dislocations, investors can often be slower to respond, providing opportunities for trend strategies like this.
Capturing Hedge Fund Performance With ETF Savings
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes. It is actively managed and is uncorrelated to traditional equities or bonds.
The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. DBE analyzes the trailing 60-day performance of CTA hedge funds and then determines a portfolio of liquid contracts that mimic the hedge funds’ averaged performance (not the positions).
By replicating hedge fund performance in an ETF, the fund offers significant savings on management fees. This translates to alpha potential in fee savings alone for DBMF.
Beer believes this replication can be done “efficiently with around ten core factors, which keeps our trading costs as low as possible.” The daily transparency the fund offers hopefully helps to make the strategy “easier to understand and explain” Beer said.
DBMF is an actively managed fund that uses long and short positions within the futures market on several asset classes. These include domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
DBMF has management fees of 0.85%
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of iMGP DBi Managed Futures Strategy ETF (DBMF) dove into historical performance in a recent video. DBMF is an actively managed fund that uses long and short positions within the futures market on several asset classes. Capturing Hedge Fund Performance With ETF Savings The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes. | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of iMGP DBi Managed Futures Strategy ETF (DBMF) dove into historical performance in a recent video. Capturing Hedge Fund Performance With ETF Savings The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes. This translates to alpha potential in fee savings alone for DBMF. | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of iMGP DBi Managed Futures Strategy ETF (DBMF) dove into historical performance in a recent video. Capturing Hedge Fund Performance With ETF Savings The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes. This translates to alpha potential in fee savings alone for DBMF. | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of iMGP DBi Managed Futures Strategy ETF (DBMF) dove into historical performance in a recent video. Capturing Hedge Fund Performance With ETF Savings The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes. This translates to alpha potential in fee savings alone for DBMF. | c80d886e-7089-4ad7-a461-99429a6cfba1 |
708723.0 | 2023-05-08 00:00:00 UTC | Managed Futures ETF DBMF Maintains Low Correlations | DBMF | https://www.nasdaq.com/articles/managed-futures-etf-dbmf-maintains-low-correlations | nan | nan | As earnings season continues, equities remain largely afloat but as recession risk looms on the horizon, a number of asset classes face a challenging second half. For advisors and investors looking for non-correlated options to stocks and bonds, the iMGP DBi Managed Futures Strategy ETF (DBMF) continues to provide significant diversification opportunities for portfolios.
Ongoing regional bank contagion fears continue to drive investor and market uncertainty, and a number of regional bank stocks gave up Friday and early Monday morning gains after falling precipitously last week, reported CBNC. Banking fear is just one string in a complicated market tapestry of prolonged volatility and challenge for a number of asset classes.
Managed futures funds dropped in the collapse of regional banks in March and the abrupt reversal of the inflation trend that they profited from in 2022. Though many are down year-to-date, they still provide strong diversification opportunity for portfolios and a non-correlated return stream.
See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF”
This Managed Futures ETF Provides Diversification
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification 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. These include domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
Image source: LOGICLY
As demonstrated in the chart above, DBMF maintains low correlations to broad commodities. The fund also offers extremely low correlations to the Dow Jones Industrial Average, the S&P 500, and the Russell 2000. In addition, DBMF maintains negative correlations the Nasdaq and significant negative correlation to bonds. (Correlations calculated using weekly returns calculated back a maximum of three years.)
The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This analyzes the trailing 60-day performance of CTA hedge funds, then determines a portfolio of liquid contracts to mimic the hedge funds’ averaged performance (not the positions).
DBMF is currently down 8.40% YTD as of May 5, 2023, presenting a buying opportunity for those seeking long-term diversification.
See also: “3 Questions Investors Are Currently Asking About Managed Futures”
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. It 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For advisors and investors looking for non-correlated options to stocks and bonds, the iMGP DBi Managed Futures Strategy ETF (DBMF) continues to provide significant diversification opportunities for portfolios. See also: “3 Questions Investors Are Currently Asking About Managed Futures” DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” This Managed Futures ETF Provides Diversification The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. | For advisors and investors looking for non-correlated options to stocks and bonds, the iMGP DBi Managed Futures Strategy ETF (DBMF) continues to provide significant diversification opportunities for portfolios. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” This Managed Futures ETF Provides Diversification The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. See also: “3 Questions Investors Are Currently Asking About Managed Futures” DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. | For advisors and investors looking for non-correlated options to stocks and bonds, the iMGP DBi Managed Futures Strategy ETF (DBMF) continues to provide significant diversification opportunities for portfolios. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” This Managed Futures ETF Provides Diversification The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. See also: “3 Questions Investors Are Currently Asking About Managed Futures” DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. | For advisors and investors looking for non-correlated options to stocks and bonds, the iMGP DBi Managed Futures Strategy ETF (DBMF) continues to provide significant diversification opportunities for portfolios. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” This Managed Futures ETF Provides Diversification The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for diversification across asset classes uncorrelated to traditional equities or bonds. Image source: LOGICLY As demonstrated in the chart above, DBMF maintains low correlations to broad commodities. | 82dccc88-a48e-4606-b3df-072d46423cc4 |
708724.0 | 2023-05-04 00:00:00 UTC | Bank Contagion Fears Flare: Ride Volatility With DBMF | DBMF | https://www.nasdaq.com/articles/bank-contagion-fears-flare%3A-ride-volatility-with-dbmf | nan | nan | On Fed rate hike expectations, regional bank shares have plummeted, with more companies flashing warning signals of contagion. Previously buoyed by a better-than-expected earnings season, markets have sagged again, as volatility and uncertainty spike. But this is an environment that managed futures strategies historically have done well in longer-term.
PacWest (PACW) is the latest regional bank to spark fear of contagion. News broke Wednesday that the bank was looking into strategic options, including possibly selling. PacWest shares fell 54% on Thursday and were stopped multiple times for volatility.
The bank is the latest in a string of regional bank failures in the U.S., as well as the collapse of Credit Suisse abroad. Fears of bank contagion have frequently weighed on markets in the last month.
“Watching Credit Suisse (CS) and First Republic go down was like watching a controlled demolition of an office building. One minute there, the next, nope,” said Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), said in a communication to VettaFi.
Contagion Fear Spreads Through Regional Bank Space
Fear and overall banking sector stress continue to weigh heavily on investors' minds, particularly as more regional banks are showing tension from the past year's rapid rate hikes.
First Horizon (FHN) dropped 36% in trading after news that its merger with TD Bank had fallen through. The termination was due to uncertainty regarding the timing of regulatory approval, reported CNBC.
Western Alliance (WAL), a regional bank out of Phoenix, was also down 38% in trading midday Thursday. All the media attention on banks will likely weigh heavily on investors, despite Federal Chair Powell’s statement post-FOMC meeting yesterday regarding the regulatory body’s belief that banking failures had likely concluded for now.
Media attention has also had another unintended consequence, according to Beer. “The publicity around SVB had an unexpected effect: The media told depositors across the country that they could get triple the yield by handing the money to Uncle Sam. So much for bank profitability.”
Invest for Bank Contagion Fear Volatility With DBMF
Lending tightening is inevitable for banks going forward. How much that impacts economic drawdown, however, remains to be seen.
Adding in the uncertainty regarding banking sector stress and contagion, the likelihood of volatility remains high, particularly as recession looms large.
“The big question today is: Do regional banks stop lending?," mused Beer. "This could cause the measured slowdown of the economy through rate hikes to morph into an economic faceplant."
Prolonged volatility is an environment that managed futures strategies have historically thrived in. This year, the abrupt reversal of the inflation trade in March has exacerbated some of the underperformance of some managed futures strategies. But as new trends emerge in light of bank tightening, these strategies are positioned to capture the changing tides.
The iMGP DBi Managed Futures Strategy ETF (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. These include domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
DBMF is currently down 8.3% YTD as of May 3, 2023, presenting a buying opportunity for those seeking long-term diversification.
[caption id="attachment_516702" align="aligncenter" width="620"] The long and short positions for DBMF, as of May 4, 2023[/caption]
Source: Dynamic Beta investments
The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This analyzes the trailing 60-day performance of CTA hedge funds, then determines a portfolio of liquid contracts to mimic the hedge funds’ averaged performance (not the positions).
DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. It 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One minute there, the next, nope,” said Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), said in a communication to VettaFi. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. So much for bank profitability.” Invest for Bank Contagion Fear Volatility With DBMF Lending tightening is inevitable for banks going forward. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. [caption id="attachment_516702" align="aligncenter" width="620"] The long and short positions for DBMF, as of May 4, 2023[/caption] Source: Dynamic Beta investments The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. DBMF takes long positions in derivatives with exposures to asset classes, sectors, or markets anticipated to grow in value. | So much for bank profitability.” Invest for Bank Contagion Fear Volatility With DBMF Lending tightening is inevitable for banks going forward. [caption id="attachment_516702" align="aligncenter" width="620"] The long and short positions for DBMF, as of May 4, 2023[/caption] Source: Dynamic Beta investments The fund’s position within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. One minute there, the next, nope,” said Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), said in a communication to VettaFi. | So much for bank profitability.” Invest for Bank Contagion Fear Volatility With DBMF Lending tightening is inevitable for banks going forward. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. One minute there, the next, nope,” said Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), said in a communication to VettaFi. | 6fd838f6-cb2b-40f9-b7c0-1b586e5a7e36 |
708725.0 | 2023-04-27 00:00:00 UTC | Mind the Gap: Equity Dispersion Remains Pronounced | DBMF | https://www.nasdaq.com/articles/mind-the-gap%3A-equity-dispersion-remains-pronounced | nan | nan | A surprise to the upside for many mega-cap stocks this earnings season, including Amazon, Meta, Alphabet, and more, resulted in major equity indexes rallying Thursday, with the Dow Jones Industrial Average closing up 500 points and the Nasdaq up 2.43%. Mega cap outperformance in Q1 overshadows the earnings misses that continue to quietly pile up. However, as dispersion between sector returns remains elevated — a marker of uncertainty that strategies like managed futures could potentially capitalize on in the coming months.
The S&P’s dispersion has remained elevated for much of 2023, a measurement of the difference in returns within a market or index. Dispersion has been exacerbated by investors chasing trends and promising stocks while simultaneously dropping under-performers, reflecting a lack of conviction in current markets, market technical analysts told Morningstar.
Dispersion for the S&P climbed to 31% at the end of March and the first quarter, up from 23% in February and above the 75th percentile historically according to S&P Dow Jones Indices data. As of the end of the first quarter, the information technology sector was up 21.62% and financials were down -5.53%.
"The dispersion of returns among sectors and industry groups has been dramatic since most stocks bottomed in September and October of 2022," Mark Arbeter, president of Arbeter Investments, explained in a note earlier this month. "This is typical in a market that has no direction, whose market participants are confused, in an uncertain economy both here and abroad, with massive disagreements over where market and government rates are going, with OPEC making waves, a war in Ukraine to deal with, etc."
Comparing the total returns of all of the S&P sector ETFs YTD highlights the dispersion between sectors as well as the pronounced and unique volatility expressed within each sector. The sector spreads have narrowed slightly this month ahead of the big tech earnings wins of the last two days, but if markets continue to rally on the backs of the mega-caps, that dispersion could widen further again.
"A lot of this has to do with so much indecision about the economy, about interest rates, about the war, about oil, that people don't take long bets. They move very quickly and once something gets hot, momentum can be very strong both to the upside and the downside," said Arbeter. "It's just a very muddled picture."
Invest for Uncertainty With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds and is a strategy that seeks to capitalize on changing trends.
DBMF 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 is currently down about -9.08% YTD as of 04/26/2023 in the wake of the abrupt reversal of the inflation trade in March. Markets remain muddled for now with no clear trends emerging but as the banking crisis, Fed, and inflation narrative solidifies in the coming months, there is an opportunity for the strategy to capitalize on shifting trends. The current price provides a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF 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). Invest for Uncertainty With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds and is a strategy that seeks to capitalize on changing trends. DBMF is currently down about -9.08% YTD as of 04/26/2023 in the wake of the abrupt reversal of the inflation trade in March. | Invest for Uncertainty With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds and is a strategy that seeks to capitalize on changing trends. DBMF 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). DBMF is currently down about -9.08% YTD as of 04/26/2023 in the wake of the abrupt reversal of the inflation trade in March. | Invest for Uncertainty With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds and is a strategy that seeks to capitalize on changing trends. DBMF 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). DBMF is currently down about -9.08% YTD as of 04/26/2023 in the wake of the abrupt reversal of the inflation trade in March. | Invest for Uncertainty With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds and is a strategy that seeks to capitalize on changing trends. DBMF 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). DBMF is currently down about -9.08% YTD as of 04/26/2023 in the wake of the abrupt reversal of the inflation trade in March. | 0d469082-664f-4108-8af0-b4ade27ff096 |
708726.0 | 2023-04-26 00:00:00 UTC | A Guide to DBMF’s Positioning in the Wake of the Bank Crisis | DBMF | https://www.nasdaq.com/articles/a-guide-to-dbmfs-positioning-in-the-wake-of-the-bank-crisis | nan | nan | The failure of Silicon Valley Bank and Signature Bank in March brought about an abrupt crash to the inflation trade that had offered strong returns during the last year for managed futures strategies. In the wake of the banking crisis, and changing market trends, managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) are positioned to capture opportunity abroad and in the trade and safety hedges such as gold and short-duration bonds.
Hedge fund managed futures strategies are shifting to capture the changing trends of markets and investors since the collapse of the inflation trade that lead to strong outperformance in 2022. At the end of February, DBMF was short positions in all Treasuries, bonds, and U.S. equities and was long the euro, MSCI EAFE, and MSCI emerging markets.
See also: "Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF"
With bank stress continuing and the increasing impacts of bank tightening on the economy, the flight to safety by investors has been substantial, and managed futures strategies are taking note for now. Post-banking collapse, DBMF is now long the one-year Treasury bill, the euro, MSCI EAFE, gold, and crude oil, and is short all other U.S. Treasuries, the yen, and U.S. equities (both daytime and overnight 3-month SOFR).
Image source: Dynamic Beta investments as of 04/06/23
The iMGP DBi Managed Futures Strategy ETF (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). DBMF is currently down 10.86% YTD as of 03/23/2023, presenting a buying opportunity for advisors and investors seeking long-term diversification for their portfolios.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Image source: Dynamic Beta investments as of 04/06/23 The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. In the wake of the banking crisis, and changing market trends, managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) are positioned to capture opportunity abroad and in the trade and safety hedges such as gold and short-duration bonds. At the end of February, DBMF was short positions in all Treasuries, bonds, and U.S. equities and was long the euro, MSCI EAFE, and MSCI emerging markets. | In the wake of the banking crisis, and changing market trends, managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) are positioned to capture opportunity abroad and in the trade and safety hedges such as gold and short-duration bonds. Image source: Dynamic Beta investments as of 04/06/23 The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. At the end of February, DBMF was short positions in all Treasuries, bonds, and U.S. equities and was long the euro, MSCI EAFE, and MSCI emerging markets. | In the wake of the banking crisis, and changing market trends, managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) are positioned to capture opportunity abroad and in the trade and safety hedges such as gold and short-duration bonds. See also: "Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF" With bank stress continuing and the increasing impacts of bank tightening on the economy, the flight to safety by investors has been substantial, and managed futures strategies are taking note for now. At the end of February, DBMF was short positions in all Treasuries, bonds, and U.S. equities and was long the euro, MSCI EAFE, and MSCI emerging markets. | Image source: Dynamic Beta investments as of 04/06/23 The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. In the wake of the banking crisis, and changing market trends, managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) are positioned to capture opportunity abroad and in the trade and safety hedges such as gold and short-duration bonds. At the end of February, DBMF was short positions in all Treasuries, bonds, and U.S. equities and was long the euro, MSCI EAFE, and MSCI emerging markets. | e83f63ac-d68e-489d-8875-54d25e8e40fe |
708727.0 | 2023-04-25 00:00:00 UTC | Ride Out Bank Sector Aftershocks With Managed Futures | DBMF | https://www.nasdaq.com/articles/ride-out-bank-sector-aftershocks-with-managed-futures | nan | nan | Bank stress caused by the Fed’s aggressive interest-rate-hiking regime, alongside the collapse of two regional banks, continues to spread tension throughout the banking sector. The fault lines are now laid bare and it remains to be seen whether the aftershocks of tightening bank lending will lead to any further economic and market impacts, creating uncertainty and longer-term volatility in the coming months that strategies like managed futures can potentially hedge for.
Banks that had stalled on raising deposit rates as Fed interest rates were raised are now faced with the reality of competing with money markets currently offering northward of 4% yields and other higher-yielding opportunities. Raising deposit rates to entice consumers and encourage deposits will further cut into profits in an already challenging environment for banks, and Goldman Sachs has estimated that each 10% decline in profits will lead to a 2% reduction in lending, reported WSJ. The U.S. banking system could be tightening by 3-6% this year (or more), curtailing economic output by another 0.5%.
Looming ever larger are unrealized losses as higher-risk commercial real-estate loans and industrial and commercial loans come due, which many banks padded their portfolios with during the period of pandemic fiscal stimulus and elevated deposits. Now, many banks don’t have the cash for these loans, and default risk could instill prolonged uncertainty and lack of confidence for depositors.
Image source: WSJ
The current environment is one in which the bank sector crisis “is in the second or third inning, not the seventh inning,” according to former Dallas Fed President Robert Kaplan on a call hosted by Evercore ISI. “I’m afraid we’ve got something coming that we don’t fully understand.”
Position for Prolong Banking Sector Stress With Managed Futures
Most advisors have positioned their portfolios for recession risk this year but the longer-term potential of banking sector stress could make the addition of a managed futures strategy that offers non-correlated returns to both equities and bonds a compelling one this year and looking ahead. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds.
DBMF 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 is currently down about -8.66% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide.
See also: “3 Questions Investors Are Currently Asking About Managed Futures“
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF 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 iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -8.66% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). DBMF is currently down about -8.66% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). DBMF is currently down about -8.66% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). DBMF is currently down about -8.66% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | aaa9c9ef-a73e-4076-a0e6-812894321a4d |
708728.0 | 2023-04-21 00:00:00 UTC | Transportation Flashes Recession Warning: Diversify With DBMF | DBMF | https://www.nasdaq.com/articles/transportation-flashes-recession-warning%3A-diversify-with-dbmf | nan | nan | Stocks for the transportation industry, as well as small-caps, have fallen behind the broad market as investors position for recession this year. In an environment of high interest rates, economic slowing, and potential recession, stocks and bonds are likely to continue to face challenges, and non-correlated diversification strategies such as managed futures could be worth consideration.
Transportation and small-cap stocks are two more economically sensitive asset classes that can indicate impending economic weakening or strengthening, and both are currently trailing their broader benchmarks.
The Dow Jones Transportation Average has lagged the Dow Jones Industrial Average since hitting its high on February 2 this year; since then it has fallen -7.6% compared to the DJIA’s drop of -0.79%. The Dow Jones Transportation Average tracks 20 large-cap U.S. transportation companies from industries such as trucking, airlines, and railroads.
Over the same period, small-caps, as measured by the S&P 600, have consistently lagged the S&P 500, dropping -11.55% compared to the S&P 500’s drop of just -1.2%.
“Transportation investors are taking a negative view of the economy, and I think ultimately they will be proved right,” Mahmood Noorani, CEO and founder of Quant Insight, told WSJ.
The drop in transportation stocks can also be attributed to specific newsworthy events, such as the derailing of a Norfolk Southern train in February in Ohio, and recent earnings expectations announcements from many airline companies that have disappointed. Freight companies such as J.B. Hunt, however, are contending with a "freight recession" brought on by deflationary prices alongside inflationary costs.
“There are concerns about the recession, volatile oil prices, and this is as good as it gets from a demand perspective,” Helane Becker, airline analyst for Cowen, an investment bank, told WSJ.
See also: "IMF Forecasts a Long Season of Global Economic Risk”
Hedging for Recession Risk With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds which are likely to offer muted performance for much of the year.
DBMF 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, and has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF 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). See also: "IMF Forecasts a Long Season of Global Economic Risk” Hedging for Recession Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds which are likely to offer muted performance for much of the year. 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, and has management fees of 0.85%. | See also: "IMF Forecasts a Long Season of Global Economic Risk” Hedging for Recession Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds which are likely to offer muted performance for much of the year. DBMF 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). 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, and has management fees of 0.85%. | See also: "IMF Forecasts a Long Season of Global Economic Risk” Hedging for Recession Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds which are likely to offer muted performance for much of the year. DBMF 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). 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, and has management fees of 0.85%. | See also: "IMF Forecasts a Long Season of Global Economic Risk” Hedging for Recession Risk With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds which are likely to offer muted performance for much of the year. DBMF 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). 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, and has management fees of 0.85%. | e188074d-dbc5-4b68-a7f1-c2f7e81ca7d6 |
708729.0 | 2023-04-18 00:00:00 UTC | 3 Questions Investors Are Currently Asking About Managed Futures | DBMF | https://www.nasdaq.com/articles/3-questions-investors-are-currently-asking-about-managed-futures | nan | nan | After a stellar year of outperformance in 2022, managed futures strategies have faced a number of challenges this year, including the abrupt reversal of the inflation trade in March on the heels of bank collapse and bank sector stress. Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), discussed the three key questions investors currently have regarding managed futures in a recent video.
See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF”
Has the Long-Term Thesis for Managed Futures Changed?
To answer this question, Beer looked back at the historical data from 2000 through March 2023 for the managed futures hedge fund space, measured by the SocGen CTA Index. Even with the extremely high fees that managed futures hedge funds charge, the index has yielded roughly 110% of the returns of bonds and 70% of stocks over the last 23 years.
Image source: Dynamic Beta investments
Moreso, it has done so “with no correlation to either, a tendency to perform best during prolonged bear markets, and a max drawdown of only 14%,” Beer explained. "While we’re obviously not thrilled with being down this year, we do always try to position DBMF as a diversifier to 60/40 portfolios, and note that it is better to have some investments that are inversely correlated to other positions even during drawdowns."
How Does the Recent Drawdown Compare to Historical Drawdowns?
In the wake of the stellar performance of managed futures last year, this year’s performance and the recent drawdown have many advisors and investors questioning if the strategy is still worth inclusion in portfolios. As of the beginning of April, most managed futures strategies were down roughly 10% YTD -- but drawdowns of this magnitude have happened at least seven times since 2000, according to Beer, and continue to pale in comparison to the drawdowns experienced by equities, bonds, or both.
“What’s striking to me is that to get the S&P 500 return… — 6.5% per annum over 23 years — investors endured a 50% drawdown, a 40% drawdown and two drops of around 20%,” said Beer. “On the other hand, bond investors experienced minimal drawdowns during the great bond bull market, until the last year or so when they gave up a decade of returns.”
Image source: Dynamic Beta investments
A 10% drawdown in comparison for managed futures strategies, while painful right now, is still a mitigated drawdown compared to those historically in other major asset classes, and managed futures strategies are already dropping out of the inflation trade positions of the last year that reversed painfully in March, derisking as they do so and searching for the new trends of the changing market and economy.
How has DBMF’s Replication Strategy Held up During Volatility?
The iMGP DBi Managed Futures Strategy ETF (DBMF) 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 seeks to replicate the performance but, with the fee savings that the ETF wrapper provides, can often outperform the SocGen CTA Index, as was the case last year. In fact, DBMF is expected to outperform the index roughly 90% of the time over any rolling one year basis due to significantly lower expenses while capturing the main drivers of the hedge fund performance.
“Part of this is due to incentive fees – when hedge funds rise 10%, they only report up 8% but we hope to be up all 10%,” Beer explained. “The flip side is that are likely to underperform on the way down after a high return period.”
What has happened this year, particularly in March, has been an enormous stress test for the replication strategy that DBMF employs.
“Even through this extraordinary period, with vicious market moves and unwinds, DBMF closely follows the daily returns of the index. Our answer to the question then is that, yes, DBMF is doing what it’s supposed to do,” said Beer.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In fact, DBMF is expected to outperform the index roughly 90% of the time over any rolling one year basis due to significantly lower expenses while capturing the main drivers of the hedge fund performance. Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), discussed the three key questions investors currently have regarding managed futures in a recent video. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” Has the Long-Term Thesis for Managed Futures Changed? | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), discussed the three key questions investors currently have regarding managed futures in a recent video. The iMGP DBi Managed Futures Strategy ETF (DBMF) 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). See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” Has the Long-Term Thesis for Managed Futures Changed? | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), discussed the three key questions investors currently have regarding managed futures in a recent video. The iMGP DBi Managed Futures Strategy ETF (DBMF) 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). See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” Has the Long-Term Thesis for Managed Futures Changed? | Andrew Beer, co-founder of Dynamic Beta Investments and co-PM of the iMGP DBi Managed Futures Strategy ETF (DBMF), discussed the three key questions investors currently have regarding managed futures in a recent video. See also: “Andrew Beer Discusses the Collapse of the Inflation Trade and DBMF” Has the Long-Term Thesis for Managed Futures Changed? "While we’re obviously not thrilled with being down this year, we do always try to position DBMF as a diversifier to 60/40 portfolios, and note that it is better to have some investments that are inversely correlated to other positions even during drawdowns." | a6777841-afdf-44ef-b601-9f60268b2130 |
708730.0 | 2023-04-11 00:00:00 UTC | IMF Forecasts a Long Season of Global Economic Risk | DBMF | https://www.nasdaq.com/articles/imf-forecasts-a-long-season-of-global-economic-risk | nan | nan | Those that were hoping for a rapid return to normalcy heading into this year are in for disappointment according to the International Monetary Fund, which is currently forecasting persistent elevated global core inflation and a muted global GDP outlook five years out. Volatility and downside risk will remain major factors for investors to contend with in the coming years, and the addition of a managed futures strategy to portfolios could prove to be a boon in times of prolonged global economic risk.
IMF anticipates that global headline inflation will fall from 8.7% last year to 7.0% in 2023, driven largely by falling commodity prices, while core inflation will fall slower and IMF models are largely forecasting for inflation to take until 2025 to fall back into normal bounds.
Global GDP is also expected to fall from 3.4% last year to 2.8% this year and then rise marginally to 3.0% in 2024, with advanced economies weighing down growth in the coming years.
“Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023,” IMF wrote in the World Economic Outlook overview. That growth is expected to remain muted in 2024 as well, remaining largely flat at 1.4%.
Image source: International Monetary Fund
Looking further ahead, IMF forecasts for global GDP of just 3% in 2028, its lowest five-year estimate in decades as persistent inflation and bank risk are likely to weigh heavily on global growth alongside long-term impacts from Russia’s war in Ukraine and heightened tensions between the U.S. and China.
“The financial challenges that a number of countries have experienced are casting a shadow on our outlook,” Pierre-Olivier Gourinchas, IMF research director, told WSJ. “We are seeing a lot of downside risks going forward.”
Hedging for Longer-Term Economic Risk With DBMF
Risk and muted global economic performance are factors that advisors and investors should be positioning portfolios to contend with on a longer-term basis. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds.
DBMF 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 is currently down about -9.76% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide.
See also: "Andrew Beer: This Is the Time to Buy Managed Futures"
The fund is currently long one-year Treasuries, MSCI EAFE, and gold, and is short all of its other holdings which include the S&P 500, crude oil, the yen and euro, emerging markets, and various Treasuries, and has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). “We are seeing a lot of downside risks going forward.” Hedging for Longer-Term Economic Risk With DBMF Risk and muted global economic performance are factors that advisors and investors should be positioning portfolios to contend with on a longer-term basis. | “We are seeing a lot of downside risks going forward.” Hedging for Longer-Term Economic Risk With DBMF Risk and muted global economic performance are factors that advisors and investors should be positioning portfolios to contend with on a longer-term basis. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). | “We are seeing a lot of downside risks going forward.” Hedging for Longer-Term Economic Risk With DBMF Risk and muted global economic performance are factors that advisors and investors should be positioning portfolios to contend with on a longer-term basis. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF 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). | DBMF 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). “We are seeing a lot of downside risks going forward.” Hedging for Longer-Term Economic Risk With DBMF Risk and muted global economic performance are factors that advisors and investors should be positioning portfolios to contend with on a longer-term basis. The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | 14d165f1-c3cd-462e-80cb-a08fd903b710 |
708731.0 | 2023-04-04 00:00:00 UTC | Markets Drop on JOLTS Report: Invest for Volatility With DBMF | DBMF | https://www.nasdaq.com/articles/markets-drop-on-jolts-report%3A-invest-for-volatility-with-dbmf | nan | nan | Markets may be finally shaking the year-long trend of bad economic news is good news for markets with the release of February’s JOLTS report on Tuesday that revealed job openings dropping at a more rapid rate than expected. Markets closed for the day, ending a four-day winning streak as volatility continues, extending an environment in which managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) can offer diversification and volatility mitigation potential.
February’s job openings dropped 632,000 to 9.93 million on expectations of 10.4 million, the first time job openings have been below 10 million since May 2021, reported CNBC. It could be a signal that the Fed’s aggressive monetary policy and fight against inflation are bearing fruit, squeezing the jobs market and further slowing the economy, and markets dropped as investors mulled over a recession.
“The Fed could consider pausing rate hikes at the next meeting but only if the upcoming employment report shows signs of material weakness and the March [consumer price index] report reveals lower inflation,” Jeffrey Roach, chief economist at LPL Financial, told CNBC.
As Recession Looms, Diversify With DBMF
The iMGP DBi Managed Futures Strategy ETF (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 is currently down about -10.65% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. The fund is currently long one-year Treasuries, MSCI EAFE, and gold, and is short all of its other holdings which include the S&P 500, crude oil, the yen, emerging markets, and various Treasuries.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Markets closed for the day, ending a four-day winning streak as volatility continues, extending an environment in which managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) can offer diversification and volatility mitigation potential. As Recession Looms, Diversify With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -10.65% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | Markets closed for the day, ending a four-day winning streak as volatility continues, extending an environment in which managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) can offer diversification and volatility mitigation potential. As Recession Looms, Diversify With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -10.65% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | Markets closed for the day, ending a four-day winning streak as volatility continues, extending an environment in which managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) can offer diversification and volatility mitigation potential. As Recession Looms, Diversify With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -10.65% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | As Recession Looms, Diversify With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. Markets closed for the day, ending a four-day winning streak as volatility continues, extending an environment in which managed futures strategies like the iMGP DBi Managed Futures Strategy ETF (DBMF) can offer diversification and volatility mitigation potential. DBMF is currently down about -10.65% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. | b5d76484-8365-49dd-9d87-c1aec537e6b2 |
708732.0 | 2023-03-29 00:00:00 UTC | Amid Banking System Worries, Keep Volatility in Check With DBMF | DBMF | https://www.nasdaq.com/articles/amid-banking-system-worries-keep-volatility-in-check-with-dbmf | nan | nan | Volatility has seen a recent spike thanks to a shaky banking system, as highlighted by recent collapses of names like Credit Suisse and First Republic bank. While help is on the way, the recent developments have injected a healthy dose of fear into investors, which could mean more volatility could be ahead.
The S&P 500 jumped to a strong start, hitting a 7% gain in the beginning of February before investor fears of rising interest rates started to creep back into their psyches. The recent news in the banking sector only added to those fears, although rescues of Credit Suisse and First Republic added a pinch of optimism.
"Equity markets drifted higher as concerns lingered about another banking flare up in the U.S. or abroad," said David Carter, managing director at JPMorgan Private Bank in New York. "Wall Street is taking its cues from Washington and other capitals as it relates to interest rates and banking regulations."
Active Volatility Protection With DBMF
If the recent rescues did enough to quell fears on the banking system, then there are still other market factors that can induce heavy market fluctuations. Interest rate policy remains a wildcard in the capital markets, so getting volatility protection is a must.
One option is to use the iMGP DBi Managed Futures Strategy ETF (DBMF). Per its fund description, it seeks to replicate the pre-fee performance of leading managed futures hedge funds and to outperform through fee/expense disintermediation.
DBMF allows for the diversification of portfolios by allocating capital to a variety of asset classes that are uncorrelated to typical capital market assets. Furthermore, DBMF is actively managed and uses both long and short positions within the futures market.
Active management provides dynamic market exposure where portfolio managers can easily flex with changing market conditions by adding to or subtracting from the fund’s holdings when conditions warrant a change. This is especially helpful in the current market where portfolios are sensitive tofinancial news
The fund’s positions within domestically managed futures and forward contracts are determined by the Dynamic Beta Engine. This strategy analyzes the trailing 60-day performance of Commodity Trading Advisor (CTA) hedge funds and then determines a portfolio of liquid contracts that would best mimic the hedge funds’ averaged performance.
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. This allows investors to capture the upside while also protecting the downside in heavy volatility.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Active Volatility Protection With DBMF If the recent rescues did enough to quell fears on the banking system, then there are still other market factors that can induce heavy market fluctuations. One option is to use the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF allows for the diversification of portfolios by allocating capital to a variety of asset classes that are uncorrelated to typical capital market assets. | 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. Active Volatility Protection With DBMF If the recent rescues did enough to quell fears on the banking system, then there are still other market factors that can induce heavy market fluctuations. One option is to use the iMGP DBi Managed Futures Strategy ETF (DBMF). | Active Volatility Protection With DBMF If the recent rescues did enough to quell fears on the banking system, then there are still other market factors that can induce heavy market fluctuations. One option is to use the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF allows for the diversification of portfolios by allocating capital to a variety of asset classes that are uncorrelated to typical capital market assets. | Furthermore, DBMF is actively managed and uses both long and short positions within the futures market. Active Volatility Protection With DBMF If the recent rescues did enough to quell fears on the banking system, then there are still other market factors that can induce heavy market fluctuations. One option is to use the iMGP DBi Managed Futures Strategy ETF (DBMF). | 3a9430d5-0acf-4a37-8bdc-3209c3925248 |
708733.0 | 2023-03-27 00:00:00 UTC | Compare the Cost of Managed Futures ETFs to Funds | DBMF | https://www.nasdaq.com/articles/compare-the-cost-of-managed-futures-etfs-to-funds | nan | nan | Looking to get into the world of managed futures ETFs? Advisors may well be intrigued by a strategy that combines can take long and short positions across asset classes in such a volatile market. As with any strategy, the cost of managed futures ETFs is a key factor, and with the ETF Database, investors can quickly compare managed futures ETF fees to a managed futures fund like the AQR Managed Futures Strategy Fund (AQMIX).
As a mutual fund, AQMIX operates differently from ETFs, without the same transparency and daily maneuverability expected in the ETF wrapper. The fund charges a 105 basis point (bps) management fee and is a good example of a managed futures strategy in the mutual fund wrapper.
Using VettaFi’s ETF Database investors can quickly screen through all sorts of ETF data, including the cost of managed futures ETFs. Looking at the strategies, all of the managed futures ETFs listed in the database charge fees that are moderately lower than the 105 bps charge attached to AQMIX, with the gap between the cheapest and most expensive fee ETFs set at 31 bps overall.
Charging the lowest fee is the WisdomTree Managed Futures Strategy Fund (WTMF), asking for 65 bps for its approach to tracking the WisdomTree Managed Futures Index. Next up is the Simplify Managed Futures Strategy ETF (CTA) which asks for 75 bps to seek absolute returns with low correlation to equities, which could be appealing given how much pressure equities are facing from the Fed and inflation.
Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities.
See more: “Andrew Beer: This Is the Time to Buy Managed Futures”
Coming in with the highest fees is the duo of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) which charges 92 bps and the First Trust Managed Futures Strategy Fund (FMF) which asks for a 96 bps charge.
KMLM actively invests to broadly track an index of long and short managed futures, allocating to commodity, currency, and global fixed income futures relative to historical volatility. FMF meanwhile also actively invests, with futures used 50% in commodities, and 25% each in currency and equity indexes.
The cost of managed futures ETFs is an important consideration when taking a look at the benefits they can provide, but with all the advantages of the ETF wrapper, they can be a powerful tool compared to strategies mainly or entirely available in a mutual fund. As such, keep an eye out for what managed futures ETFs can deliver for their lower fees in the weeks and months ahead.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities. Advisors may well be intrigued by a strategy that combines can take long and short positions across asset classes in such a volatile market. As such, keep an eye out for what managed futures ETFs can deliver for their lower fees in the weeks and months ahead. | Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities. As with any strategy, the cost of managed futures ETFs is a key factor, and with the ETF Database, investors can quickly compare managed futures ETF fees to a managed futures fund like the AQR Managed Futures Strategy Fund (AQMIX). Charging the lowest fee is the WisdomTree Managed Futures Strategy Fund (WTMF), asking for 65 bps for its approach to tracking the WisdomTree Managed Futures Index. | Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities. As with any strategy, the cost of managed futures ETFs is a key factor, and with the ETF Database, investors can quickly compare managed futures ETF fees to a managed futures fund like the AQR Managed Futures Strategy Fund (AQMIX). Charging the lowest fee is the WisdomTree Managed Futures Strategy Fund (WTMF), asking for 65 bps for its approach to tracking the WisdomTree Managed Futures Index. | Arriving squarely in the middle is the iMGP DBi Managed Futures Strategy ETF (DBMF) from iMGP, which charges 85 bps for an active approach that aims to imitate the performance of a group of Commodity Trading Advisors (CTA) hedge funds that use derivatives to invest across other asset classes outside of commodities. As with any strategy, the cost of managed futures ETFs is a key factor, and with the ETF Database, investors can quickly compare managed futures ETF fees to a managed futures fund like the AQR Managed Futures Strategy Fund (AQMIX). The fund charges a 105 basis point (bps) management fee and is a good example of a managed futures strategy in the mutual fund wrapper. | 491a8d77-754f-4fac-b0d1-26b3e97b17e0 |
708734.0 | 2023-03-24 00:00:00 UTC | Andrew Beer: This Is the Time to Buy Managed Futures | DBMF | https://www.nasdaq.com/articles/andrew-beer%3A-this-is-the-time-to-buy-managed-futures | nan | nan | March has been a rollercoaster month for markets. The collapse of two regional banks mid-month sent shockwaves throughout the bond market that reverberated globally as investors fled to Treasuries, driving yields down sharply. It was a drastic change that caught most managed futures strategies suddenly on the wrong side of the Treasuries trade. I recently had the chance to talk with Andrew Beer, co-portfolio manager of iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, about what the sudden changes mean for managed futures and one of 2022’s top-performing ETFs.
Inflection Point Vs. Regime Shift
Tension remains high in the banking sector as banks rush to keep First Republic afloat in the U.S. and prevent possible contagion in the wake of the Fed takeover of two regional banks, Silicon Valley Bank and Signature Bank, while overseas the Swiss National Bank stepped into backstop Credit Suisse as it waits for a takeover by UBS.
The rapid collapse of SVB in the U.S. followed within days by Signature, caused investors to flood into Treasuries, driving yields down in the sharpest decline since the Financial Crisis. March 8 was an inflection point for bonds and the sudden drop in yields created a significant pain point for CTA strategies that benefited from a short position on Treasuries for the last year.
The yield on the two-year Treasury dropped from 5.05% on March 8 to close two days later at 4.6% while the 10-year dropped from 3.98% to 3.7% over the same period, the sharpest two-day decline since the Financial Crisis.
“CTAs hate inflection points but love regime shifts,” explained Beer. “Mid-March was an inflection point: does this reflect a new regime and, if so, shouldn’t there be great money-making opportunities like during the GFC?”
Only time will tell what effect bank sector turmoil will have on markets and consumers as banks tighten and reduce lending, leading to less liquidity for consumers and businesses still toiling away in an environment of high inflation and reduced purchasing power. A recent Bank of America survey of global fund managers revealed systemic credit risk as the top tail risk for 2023 and fund managers are buckling up for the ride, with 41% of participants reporting lower-than-average risk-taking.
“CTAs historically have performed better in months 2-6 of a crisis. This could be week three of a global banking catastrophe,” Beer hypothesized.
The Short- and Long-Term Outlook for Managed Futures
CTA managers may have been caught by the abrupt drop in Treasuries mid-month but it’s important to remember that while inflection points hurt in the immediate days and weeks after. It’s pain that tends to be more temporary for strategies that can rapidly adapt to changing trends. If this is the beginning of a regime shift for markets, CTA strategies will be flipping positions to capture the shifting tides.
“This week and next, CTAs will jettison losing positions and hunt for new trades better suited for this new regime,” Beer explained. DBMF, which employs a replication strategy of the average performance of the largest CTA hedge funds, has already picked up a long position in the one-year Treasury after being short Treasuries for months.
As to the outlook in the interim, Beer is keeping an eye on liquidity. A banking crisis would elevate the importance of liquidity and few strategies available to investors can offer liquidity like managed futures. Furthermore, Beer argues that a banking crisis that leads to both Treasuries and stocks faltering would propel investors into the futures market, providing further liquidity in the event of extreme market stress, dislocation, or breakage.
“Now we see where the real leverage is in the system: not futures, which are liquid, but rather illiquid assets financed by lenders. That’s where the real action will be.”
Looking further ahead, continued banking turmoil and crisis would create an entirely different environment from last year, which Beer described as an “orderly repricing of assets”. In the event of bank contagion or continued stress, volatility amongst any number of asset classes could be pronounced and unpredictable.
Managed futures remain a compelling addition to portfolios for their non-correlated return stream and the strong uncertainty of the outlook for even the next month, much less six months from now. Even Fed officials remain uncertain as to the path of monetary policy, given the addition of bank stress as a major factor. Predictions for interest rates next year range anywhere from 3.25%-5.75% according to the FOMC dot plot released post-March meeting.
Image source: Federal Reserve
For now, the only certainty seems to be uncertainty as markets continue to unwind from a decade of underlying Fed puts that suppressed market volatility and led to a boom in equity and growth strategies that have since faltered and fallen. It’s the kind of environment that managed futures can thrive in as regimes shift, providing strong diversification for portfolios.
“As we have been saying for a year, the implosion of the Superbubble likely will play out over years, not quarters,” said Beer. “This should present plenty of compelling opportunities for CTAs.”
Investing in Managed Futures With DBMF
The iMGP DBi Managed Futures Strategy ETF (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). DBMF is currently down 10.86% YTD as of 03/23/2023, presenting a buying opportunity for advisors and investors seeking long-term diversification for their portfolios.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I recently had the chance to talk with Andrew Beer, co-portfolio manager of iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, about what the sudden changes mean for managed futures and one of 2022’s top-performing ETFs. DBMF, which employs a replication strategy of the average performance of the largest CTA hedge funds, has already picked up a long position in the one-year Treasury after being short Treasuries for months. “This should present plenty of compelling opportunities for CTAs.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | I recently had the chance to talk with Andrew Beer, co-portfolio manager of iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, about what the sudden changes mean for managed futures and one of 2022’s top-performing ETFs. “This should present plenty of compelling opportunities for CTAs.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | I recently had the chance to talk with Andrew Beer, co-portfolio manager of iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, about what the sudden changes mean for managed futures and one of 2022’s top-performing ETFs. “This should present plenty of compelling opportunities for CTAs.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF, which employs a replication strategy of the average performance of the largest CTA hedge funds, has already picked up a long position in the one-year Treasury after being short Treasuries for months. | “This should present plenty of compelling opportunities for CTAs.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. I recently had the chance to talk with Andrew Beer, co-portfolio manager of iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, about what the sudden changes mean for managed futures and one of 2022’s top-performing ETFs. DBMF, which employs a replication strategy of the average performance of the largest CTA hedge funds, has already picked up a long position in the one-year Treasury after being short Treasuries for months. | f3ca8c26-4375-4a27-bd0f-c8469386a782 |
708735.0 | 2023-03-23 00:00:00 UTC | Recession Risks: Consumer Confidence and the “Wealth Effect” | DBMF | https://www.nasdaq.com/articles/recession-risks%3A-consumer-confidence-and-the-wealth-effect | nan | nan | The Federal Reserve raised interest rates another quarter point this month, though signaled that an end could be in sight as they keep an eye on banking sector turmoil. That turmoil could have spillover effects however, exacerbating many of the risk factors for recession as consumer confidence and spending drop and potentially leading to further market decline and dislocations that managed futures strategies could offer non-correlated diversification for.
Banking sector stress in the wake of the collapse of Silicon Valley Bank and Signature, and the ongoing uncertainty surrounding First Republic as well as Credit Suisse’s woes overseas have dealt a serious blow to confidence in the sector.
“The bank problems are probably making a lot of people think twice,” Diana Furchtgott-Roth, an economics professor at George Washington University and former chief economist at the U.S. Department of Labor, told CNBC.
Furchgott-Roth underscored the role of the “wealth effect” looking ahead. When people feel less financially stable and confident, they spend less. This in turn leads to slowing retail sales and other consumer goods, which in turn leads to a market reaction that affects consumers.
The Consumer Confidence Index from the Conference Board dropped to 102.9 as of the end of February, the second consecutive decline, while the Expectations Index which measures the short-term outlook for business, income, and labor markets fell to 69.7 — levels below 80 historically signaled a recession in the next 12 months. The Expectations Index has been below 80 in 11 of the last 12 months.
Image source: The Conference Board
Add into the mix rising rates alongside falling income (when adjusted for inflation) and bank tightening that will happen in the wake of the current stress in the banking sector leading to reduced lending to consumers and it puts a cash crunch on households still contending with high inflation and reduced purchasing power. It’s a feedback loop that could further exacerbate recession odds this year as even wealthier consumers feel the squeeze.
“It’s not how many dollar bills you have, it’s what you can buy with them,” Tomas Philipson, an economist at the University of Chicago and former chair of the White House Council of Economic Advisers, told CNBC.
Play Increasing Recession Risks With Managed Futures
Under the Fed hiking regime of the last year, bonds and equities have moved in tandem, both underperforming in portfolios. Banking turmoil has led to sharp declines in bond yields in the last week, and recession risks will pose several challenges for equities, creating a further challenge for traditional portfolios.
In a recent webcast hosted on the VettaFi platform, “The Correlation Conundrum: How to Invest When Diversification No Longer Works”, over 300 attendees were asked what their response to the correlation conundrum of equities and bonds has been. 69.3% of respondents answered overwhelmingly that they seek solutions with lower correlations.
The iMGP DBi Managed Futures Strategy ETF (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 is currently down about -9.75% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. The fund is currently long 1-year Treasuries, the euro, MSCI EAFE, and gold, and is short all of its other holdings which include crude oil, the yen, emerging markets, and various Treasuries.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9.75% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9.75% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9.75% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9.75% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | 2def08d1-ca39-4107-a20f-da80b9845f60 |
708736.0 | 2023-03-16 00:00:00 UTC | Banks Take a Breather: Consider Managed Futures in Uncertainty | DBMF | https://www.nasdaq.com/articles/banks-take-a-breather%3A-consider-managed-futures-in-uncertainty | nan | nan | Markets closed for the day on the reassurance that big banks were stepping in to provide relief for troubled regional bank First Republic, quelling immediate concerns of bank contagion. It’s provided a brief lull in volatility but uncertainty and potential for bank crisis both at home and abroad continue to dominate investor concerns, creating a turbulent market environment that managed futures strategies could capitalize on looking forward.
Immediate concern about bank contagion appears to be easing as major banks step in to aid First Republic, the latest regional bank to struggle from capitulating stock prices and depositor withdrawals. First Republic catered to a similar customer base as Silicon Valley Bank and in the wake of billions of deposit withdrawals last week, First Republic announced additional funding from the Federal Reserve and JPMorgan over the weekend that would add $70 billion of funding and liquidity to the beleaguered bank.
In total, 11 banks have now deposited $30 billion into First Republic Bank, including JPMorgan, Citigroup, Wells Fargo, and others, according to the joint press release from the Department of Treasury, Federal Reserve, FDIC, and OCC, as the banking sector fights to stem the tide of contagion. It remains uncertain whether it will be enough to evoke confidence for banking clients, particularly given that the risk of uninsured deposits has been underscored in the wake of SVB’s collapse.
Treasury Secretary Janet Yellen reassured senators today that the Fed will only protect depositors over the $250,000 FDIC insurance limit for targeted, strategic banks should they go under. These protections will only be provided if “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences,” Yellen said.
Investing for Volatility With Managed Futures
Market volatility has spiked in recent days, crossing the 29 threshold — 30 is a marker for extreme volatility — on Wednesday before dropping down to 23 on Thursday. Uncertainty regarding the Fed’s interest rate path and if there will be a banking crisis in earnest are likely to continue to propel market turbulence in the days and weeks ahead.
The iMGP DBi Managed Futures Strategy ETF (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 is currently down about -9% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF is currently down about -9% YTD, providing a buying opportunity for advisors and investors looking to add the non-correlated opportunities that managed futures can provide. DBMF has management fees of 0.85%. | cd006f10-76de-47eb-b4dc-321e0564a2cf |
708737.0 | 2023-03-09 00:00:00 UTC | The Favorable Environment for Macro Strategies Could Last Years | DBMF | https://www.nasdaq.com/articles/the-favorable-environment-for-macro-strategies-could-last-years | nan | nan | Macro trading strategies utilized for decades by hedge funds have swung back into favor in the last year and look to be here to stay, given the change in central bank policies that are likely to create a favorable environment for such strategies in the years to come.
A macro trading strategy looks at the big movements happening at the global asset level and includes equities, bonds, currencies, and more. These types of strategies suffered in the environment of the 2010s when central bank stimulus paved the way for a fairly sustained bull run in equities and suppressed volatility.
The onset of the pandemic in 2020 sent a shockwave through global markets that both macro strategies and trend-following strategies have been flourishing in ever since.
Hedge Funds Positioning for Greater Capital Influx Into Macro Strategies
“There’s been a paradigm shift in interest in macro from the previous decade to now, due in large part to central bank activity,” Kenneth Tropin, chair of Graham Capital, told Financial Times. “Macro markets have been moving like crazy, last year was particularly good and the opportunity set is fantastic looking ahead.”
Graham Capital has about $17.5 billion in AUM and has hired both an economist and a macro fund manager in recent months, part of an overall trend for many hedge fund firms as they position for increased investors in the space looking ahead. ExodusPoint and Schonfeld are two firms that have also recently made big hires, and Trium Capital out of London launched its first macro fund at the end of last year in anticipation of “a rich era for global macro” according to Donald Pepper, the firm’s co-CEO.
Macro trading strategy funds on average gained 9% last year compared to the over 17% drop in the S&P in an environment of central bank tightening that sent interest rates and bond yields soaring while equities struggled under the weight of inflation.
According to Paul Britto, CEO of Capstone, the shifting of central bank policy means that markets are no longer constrained, allowing for the kind of environment that trend-following strategies thrive in now and will likely for years to come.
“Investors are particularly focused on the paradigm shift and what’s happening in rates and inflation,” Marlin Naidoo, global head of capital introduction at BNP Paribas, told FT. “Macro is very well positioned to take advantage of that.”
DBMF Offers Hedge Fund Strategy in an ETF
The iMGP DBi Managed Futures Strategy ETF (DBMF) capitalized on the market dislocation and volatility of the last year, capturing the changing trends within global markets via managed futures, a popular hedge fund strategy: DBMF was up 23.5% in 2022.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “Investors are particularly focused on the paradigm shift and what’s happening in rates and inflation,” Marlin Naidoo, global head of capital introduction at BNP Paribas, told FT. “Macro is very well positioned to take advantage of that.” DBMF Offers Hedge Fund Strategy in an ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) capitalized on the market dislocation and volatility of the last year, capturing the changing trends within global markets via managed futures, a popular hedge fund strategy: DBMF was up 23.5% in 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | “Investors are particularly focused on the paradigm shift and what’s happening in rates and inflation,” Marlin Naidoo, global head of capital introduction at BNP Paribas, told FT. “Macro is very well positioned to take advantage of that.” DBMF Offers Hedge Fund Strategy in an ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) capitalized on the market dislocation and volatility of the last year, capturing the changing trends within global markets via managed futures, a popular hedge fund strategy: DBMF was up 23.5% in 2022. 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 allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | “Investors are particularly focused on the paradigm shift and what’s happening in rates and inflation,” Marlin Naidoo, global head of capital introduction at BNP Paribas, told FT. “Macro is very well positioned to take advantage of that.” DBMF Offers Hedge Fund Strategy in an ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) capitalized on the market dislocation and volatility of the last year, capturing the changing trends within global markets via managed futures, a popular hedge fund strategy: DBMF was up 23.5% in 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | “Investors are particularly focused on the paradigm shift and what’s happening in rates and inflation,” Marlin Naidoo, global head of capital introduction at BNP Paribas, told FT. “Macro is very well positioned to take advantage of that.” DBMF Offers Hedge Fund Strategy in an ETF The iMGP DBi Managed Futures Strategy ETF (DBMF) capitalized on the market dislocation and volatility of the last year, capturing the changing trends within global markets via managed futures, a popular hedge fund strategy: DBMF was up 23.5% in 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | e9c6b228-badd-4424-89d8-06ce4ff934de |
708738.0 | 2023-03-02 00:00:00 UTC | DBMF’s Returns Track Record Beats SPY | DBMF | https://www.nasdaq.com/articles/dbmfs-returns-track-record-beats-spy | nan | nan | Managed futures offer a number of benefits to portfolios, including risk and volatility mitigation and a return stream uncorrelated with stocks and bonds. While they’re considered the risk insurance play for portfolios, the iMGP DBi Managed Futures Strategy ETF (DBMF) currently offers better total returns since inception than the broad S&P, making it a noteworthy fund on several levels.
Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations, and they have been an immensely popular choice for advisors and investors alike in the last year. Given the number of risks still at play for global markets, 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 and the inflation and Fed narrative.
The iMGP DBi Managed Futures Strategy ETF (DBMF) was launched May 8, 2019 and has capitalized on the market dislocation and volatility of the last year. From inception to now, DBMF has total returns of 49.90% compared to the SPDR S&P 500 ETF Trust (SPY) total returns of 46.17% over the same period. For correlation purposes, the total return of the iShares Core US Aggregate Bond ETF (AGG) over the same time period is -3.29%.
“Managed futures are intended to zig when the stock market zags, so it is great to see in the market volatility of the last three years, the leader managing futures ETF is doing what it should to add diversification for advisors. It's no surprise demand for DBMF has been so strong in the past year,” said Todd Rosenbluth, head of research at VettaFi.
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).
Currently, DBMF is long on the euro and MSCI EAFE, and short on everything else, including U.S. Treasuries, bonds, U.S. equities, and emerging markets, as of March 1, 2023.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | While they’re considered the risk insurance play for portfolios, the iMGP DBi Managed Futures Strategy ETF (DBMF) currently offers better total returns since inception than the broad S&P, making it a noteworthy fund on several levels. Given the number of risks still at play for global markets, 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 and the inflation and Fed narrative. The iMGP DBi Managed Futures Strategy ETF (DBMF) was launched May 8, 2019 and has capitalized on the market dislocation and volatility of the last year. | While they’re considered the risk insurance play for portfolios, the iMGP DBi Managed Futures Strategy ETF (DBMF) currently offers better total returns since inception than the broad S&P, making it a noteworthy fund on several levels. The iMGP DBi Managed Futures Strategy ETF (DBMF) was launched May 8, 2019 and has capitalized on the market dislocation and volatility of the last year. Given the number of risks still at play for global markets, 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 and the inflation and Fed narrative. | While they’re considered the risk insurance play for portfolios, the iMGP DBi Managed Futures Strategy ETF (DBMF) currently offers better total returns since inception than the broad S&P, making it a noteworthy fund on several levels. Given the number of risks still at play for global markets, 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 and the inflation and Fed narrative. The iMGP DBi Managed Futures Strategy ETF (DBMF) was launched May 8, 2019 and has capitalized on the market dislocation and volatility of the last year. | While they’re considered the risk insurance play for portfolios, the iMGP DBi Managed Futures Strategy ETF (DBMF) currently offers better total returns since inception than the broad S&P, making it a noteworthy fund on several levels. Given the number of risks still at play for global markets, 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 and the inflation and Fed narrative. The iMGP DBi Managed Futures Strategy ETF (DBMF) was launched May 8, 2019 and has capitalized on the market dislocation and volatility of the last year. | 0a6871d2-e5dd-4f47-8ef6-5309c5863e18 |
708739.0 | 2023-02-23 00:00:00 UTC | Navigate Risk in 2023 With Managed Futures and DBMF | DBMF | https://www.nasdaq.com/articles/navigate-risk-in-2023-with-managed-futures-and-dbmf | nan | nan | The risks that played havoc on markets and economies last year continue to be a driving force at the beginning of this year as geopolitical tensions ramp up, the U.S. economy shows resilience in the face of Fed tightening, and inflation proves to be stickier than previously anticipated. The potential for markets to get the narrative wrong remains a significant risk for investors this year, but it could result in the kind of dislocation that managed futures capitalize on.
Tensions with China continue to grow, increasing geopolitical risk as the U.S. commits to sending more troops to Taiwan this year to train the local military. On a separate front, China is rumored to be considering supplying arms to Russia for use in its war against Ukraine, a risk pronounced enough to elicit public warning from the U.S. over the weekend from U.S. Secretary of State Antony Blinken.
“The most catastrophic thing that could happen to U.S.-China relationship, in my opinion, is for China…to start to give lethal weapons to Putin in this crime against humanity,” Senator Lindsey Graham (R., S.C.) said on Sunday.
At home, the resilience of the U.S. economy and the jobs market continues to throw a wrench into market expectations of the Fed’s rate hiking path. While the Fed has been leery of committing to any set path, officials have made very clear that they are willing to aggressively fight inflation, whatever the cost. It’s created an environment where investors and markets are trying to second guess the rate hiking path, creating prolonged volatility as each month brings new revisions to expectations.
“This is a data-dependent Fed, that focuses less on a forecast and more on each individual data point,” Brent Schutte, CIO at Northwestern Mutual Wealth Management, told CNBC.
Inflation itself could be proving to be stickier and more entrenched on the goods side than previously thought, with supply chain imbalances and costs likely to result in higher prices for consumers in the second and third quarter of this year. Retail sales were also up 3% in January, while the services sector is experiencing increased demand.
“The U.S. consumer has a very steady pulse, they’re looking healthy,” Vasant Prabhu, CFO at Visa, told WSJ in an interview.
Increased consumer spending and demand could prove to create longer-term, upward pressure on prices, further conflating the inflation narrative looking ahead. Inflation has already slowed its descent as of January, increasing 0.5% on a seasonally adjusted basis after just a 0.1% rise in December, increasing 6.4% year-over-year.
Navigate Risk and 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. Given the number of risks still at play for global markets, 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 and the inflation narrative.
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).
Currently, DBMF is long on the euro, MSCI EAFE, and MSCI emerging markets, but short on everything else, including U.S. Treasuries, bonds, and U.S. equities as of February 23, 2023.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Navigate Risk and 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. Given the number of risks still at play for global markets, 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 and the inflation narrative. | Navigate Risk and Volatility With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. 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. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | Navigate Risk and Volatility With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. Given the number of risks still at play for global markets, 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 and the inflation narrative. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | Navigate Risk and 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. Given the number of risks still at play for global markets, 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 and the inflation narrative. | 39731332-f7b9-44b7-9255-e4f749a147ff |
708740.0 | 2023-02-22 00:00:00 UTC | No Investor Relief From Volatility Puts This Managed Futures ETF in Play | DBMF | https://www.nasdaq.com/articles/no-investor-relief-from-volatility-puts-this-managed-futures-etf-in-play | nan | nan | 2022 gave investors a crash course in volatility, which should make the 2023 stress test a breeze. There won't be any investor relief from volatility as capital markets continue to digest inflation data.
A decade-long bull market is now giving way to heavy market fluctuations, as evidenced in last year's inflation-ridden tumult that saw major stock market indexes drop. The U.S. Federal Reserve acknowledges that getting inflation under control will take time, and there's always a lingering potential that too much monetary policy tightening could give way to reduced economic growth -- or worse, a recession.
"We are now in a consolidation period that marks the end of a secular bond bull market that lasted more than 35 years This period will be characterised by reduced market liquidity, capital rationing and persistent volatility in asset prices," a Financial Times article said, noting that a potential recession could be on the horizon as the Fed continues to try to wrestle with inflation.
"During this kind of consolidation period, market participants have to be thoughtful and nimble about where to invest," the article added. "A recession could come as early as the middle of the year, but corporate credit fundamentals are strong heading into the downturn."
Implement a Managed Futures Strategy
There are a number of ways to hedge against volatility in the markets. A common refrain is that investors don't want to sacrifice gains in order to limit market fluctuations, but there are options to get a nice mix of volatility protection and returns.
To gain that potential upside in the markets while limiting volatility, investors can opt for an exchange traded fund (ETF) that incorporates a managed futures strategy. With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF).
For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. For a dynamic component, the fund is actively managed, allowing for adjustments to the fund's holdings by seasoned portfolio managers.
DBMF uses long and short positions in the futures market for hedging against wild swings in the market. As mentioned, positions span across a broad range of assets, including 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.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. DBMF uses long and short positions in the futures market for hedging against wild swings in the market. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). 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. For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. DBMF uses long and short positions in the futures market for hedging against wild swings in the market. | DBMF uses long and short positions in the futures market for hedging against wild swings in the market. With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. | 63d12707-2cc7-4679-8672-1e4c06d944f3 |
708741.0 | 2023-02-16 00:00:00 UTC | Inflation Report Re-Emphasizes the Need for Volatility Protection | DBMF | https://www.nasdaq.com/articles/inflation-report-re-emphasizes-the-need-for-volatility-protection | nan | nan | Heading into 2023, inflation was going to remain the hot topic in the capital markets, with all eyes on the first month's inflation report. Inflation came in a bit hotter than anticipated, reminding investors that volatility is still a concern moving forward in 2023.
The expectation that the U.S. Federal Reserve would loosen its monetary policy got off to the wrong start with January's inflation report. As such, investors shifted into a defensive stance, especially after last year's tumult in the stock market.
Still, the numbers weren't too bad, which could hint that future inflation reports could show more signs of easing. Nonetheless, any indications of inflation ticking higher could send the major stock market indexes in the red.
"Inflation eased slightly at the start of 2023, advancing 6.4% in January from a year earlier, as consumer prices increased for energy, housing, food and many other items," a Wall Street Journal report said.
"The increase in the consumer-price index, a closely watched measure of inflation, edged down from 6.5% in December, the Labor Department said Tuesday (February 14)," the report added. "That marked the seventh straight month of easing inflation since peaking at 9.1% in June, the highest reading since 1981."
The Fed noted that getting inflation under control won't be an overnight accomplishment. As such, relatively high inflation could be here to stay for some time, which warrants a hedging strategy in case volatility strikes again (and it typically does).
“While the overall trend continues to improve, inflation continues to wield formidable momentum,” said Sarah House, senior economist at Wells Fargo. “The Federal Reserve is justified in its concern that inflation won’t easily be brought to heel.”
Ease Volatility With Managed Futures
To gain potential upside in the markets while limiting volatility, investors can opt for an exchange traded fund (ETF) that incorporates a managed futures strategy. With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF).
For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. For a dynamic component, the fund is actively managed, allowing for adjustments to the fund's holdings by seasoned portfolio managers.
DBMF uses long and short positions in the futures market for hedging against wild swings in the market. As mentioned, positions span across a broad range of assets, including 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.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. DBMF uses long and short positions in the futures market for hedging against wild swings in the market. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). 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. For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. | With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. DBMF uses long and short positions in the futures market for hedging against wild swings in the market. | For portfolio diversification, DBMF invests in asset classes uncorrelated to traditional equities or bonds. With its 0.85% expense ratio, consider the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF uses long and short positions in the futures market for hedging against wild swings in the market. | 24547b23-3cfb-4669-b4b0-d5c13ed0c609 |
708742.0 | 2023-02-14 00:00:00 UTC | Capitalize on Uncertainty With DBMF as Inflation Proves Persistent | DBMF | https://www.nasdaq.com/articles/capitalize-on-uncertainty-with-dbmf-as-inflation-proves-persistent | nan | nan | January’s inflation report eased slightly but still surprised to the upside of expectations, rising 0.5% month-over-month and 6.4% year-over-year on expectations of 0.4% and 6.2%, respectively. Core inflation, a measurement the Fed watches closely, also came in higher than analyst expectations and is likely to contribute to continued market uncertainty and volatility, an environment that managed futures capitalize on.
CPI rose just 0.1% in December month-over-month, and January’s 0.5% could be an indicator that inflation will be both higher and more persistent than markets are currently pricing for. Core inflation that excluded energy and food was up 0.4% from December and 5.6% from a year ago on expectations of 0.3% and 5.5% gains.
“Inflation is easing but the path to lower inflation will not likely be smooth,” Jeffrey Roach, chief economist at LPL Financial, told CNBC. “The Fed will not make decisions based on just one report but clearly the risks are rising that inflation will not cool fast enough for the Fed’s liking.”
Image source: St. Louis Federal Reserve
Recent Fed language has included a discussion on the disinflationary environment that is beginning to coalesce in response to aggressive rate hikes and quantitative tightening, and markets are currently anticipating two more 0.25% rate hikes between March and May. Should the inflation narrative shift to one of persistence, it could see the Fed hiking even higher than the predicted 5.25% terminal rate, a level last seen between 2006–2007 ahead of the 2008 financial crisis and subsequent recession.
“The strength of core inflation suggests that the Fed has a lot more work to do to bring inflation back to 2%,” Maria Vassalou, co-CIO of multi-asset solutions at Goldman Sachs Asset Management, told CNBC. “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.”
Invest for Inflation Uncertainty 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 and the inflation narrative.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.” Invest for Inflation Uncertainty With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. 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 and the inflation narrative. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.” Invest for Inflation Uncertainty With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. 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. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.” Invest for Inflation Uncertainty 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 and the inflation narrative. | “If retail sales also show strength tomorrow, the Fed may have to increase their funds rate target to 5.5% in order to tame inflation.” Invest for Inflation Uncertainty 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 and the inflation narrative. | 3706abfd-a307-4cdd-a125-0ee83dccc8df |
708743.0 | 2023-02-13 00:00:00 UTC | A Day in the Educational Life of an ETF Nerd at Exchange | DBMF | https://www.nasdaq.com/articles/a-day-in-the-educational-life-of-an-etf-nerd-at-exchange | nan | nan | Just over a week ago, the Exchange conference kicked off. The event had well over 1,800 attendees, including hundreds of advisors, who descended on Miami, Florida, to learn from each other and industry experts.
I had the pleasure of being on stage a few times but tried to soak in as much as possible over the conference. Below is a brief recap of some of the content from Sunday, February 5. Tomorrow, I will focus on what happened outside of the sessions. It should be noted that often there were two panels going on at once in different rooms, so I missed a lot of great stuff.
At 1:00 PM, I caught VettaFi's president Tom Hendrickson and chief marketing officer Jon Fee's session to kick off the ETF industry and media track of the pre-conference discussing the future of distribution, which quite simply is tied to data and the need to have a single source of truth. According to Hendrickson and Fee, the winners in the future of distribution will be people who lean into their core competency, partner with those who have aligned incentive structures, build agile data cultures, and continue to get reacquainted with today's customers.
I left the industry and media track, which included a meet-the-press panel with some of my favorite reporters and a regulatory panel with the behind-the-scenes lawyers. I had to do final prep and get set up for my presentation.
At 2:20 PM, I caught the final section of Margurita Cheng, CEO of Blue Ocean Global Wealth's, session on modern advisor ethics, just as she was talking about the dos and don'ts of social media, focused on what is compliant for an advisor -- thankfully, I haven't been an advisor in 25 years. I spoke to an advisor named Steve during the break, who said the training was "more interesting than most" and that he was glad to be "getting continuing education (CE) credits in person."
At 3:00 PM, Lara Crigger, VettaFi's editor-in-chief, and I ran the first leg of the ETF University five-part series that was also eligible for two CE credits; Lara incidentally was part of the meet the press panel a good walk from where I was and yet joined me mid-slide. She and I covered the record year for active equity ETFs, value, and smart beta, as well as the categories of ETFs advisors most interested in during 2022. For example, managed futures ETFs, like the iMGP DBi Managed Futures Strategy ETF (DBMF), surged in popularity, as did ultra-short duration Treasury products.
At 3:20 PM, some of the smartest people in the ETF industry who do not work at VettaFi took the stage to offer due diligence tips for advisors. Elisabeth Kashner of FactSet, Eric Balchunas of Bloomberg Intelligence, and Aniket Ullal of CFRA talked about tracking difference, exposure, liquidity, costs, and more. Then the trio of analysts was joined by Nate Geraci, an advisor and president of the ETF Store, where some of the more popular ETFs of 2022 were debated. The JPMorgan Equity Premium Income ETF (JEPI) and the Vanguard Tax-Exempt Bond ETF (VTEB) were a few that caught my ear.
Following a session from Ugo Egbunike of Jane Street with ETF trading tips, the ETF University section closed with Cinthia Murphy leading a panel of ETF Strategists or soon-to-be ETF Strategists (John Davi, Lisa Kirschner, and Shana Orczyk Sissel) who reviewed their approach to sorting through the universe of 3,000 ETFs, the role alternatives can play in a traditional portfolio, and the efficiencies found by using ETFs.
At the end of the nearly two-hour session, around 3:55 PM, I met Mark, an advisor who called himself an ETF nerd but said he "still found the ETF University session enjoyable because of the wide range of expertise." This was music to my ears, so I gave him two guitar picks, the currency we were using at VettaFi to encourage attendees.
It was probably the most educational Sunday I've been a part of since I was in college many years ago. But this time, when it was done, I legally had a beer at the opening night reception.
For more coverage of the Exchange conference, visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For example, managed futures ETFs, like the iMGP DBi Managed Futures Strategy ETF (DBMF), surged in popularity, as did ultra-short duration Treasury products. At 1:00 PM, I caught VettaFi's president Tom Hendrickson and chief marketing officer Jon Fee's session to kick off the ETF industry and media track of the pre-conference discussing the future of distribution, which quite simply is tied to data and the need to have a single source of truth. According to Hendrickson and Fee, the winners in the future of distribution will be people who lean into their core competency, partner with those who have aligned incentive structures, build agile data cultures, and continue to get reacquainted with today's customers. | For example, managed futures ETFs, like the iMGP DBi Managed Futures Strategy ETF (DBMF), surged in popularity, as did ultra-short duration Treasury products. At 1:00 PM, I caught VettaFi's president Tom Hendrickson and chief marketing officer Jon Fee's session to kick off the ETF industry and media track of the pre-conference discussing the future of distribution, which quite simply is tied to data and the need to have a single source of truth. I spoke to an advisor named Steve during the break, who said the training was "more interesting than most" and that he was glad to be "getting continuing education (CE) credits in person." | For example, managed futures ETFs, like the iMGP DBi Managed Futures Strategy ETF (DBMF), surged in popularity, as did ultra-short duration Treasury products. At 1:00 PM, I caught VettaFi's president Tom Hendrickson and chief marketing officer Jon Fee's session to kick off the ETF industry and media track of the pre-conference discussing the future of distribution, which quite simply is tied to data and the need to have a single source of truth. Following a session from Ugo Egbunike of Jane Street with ETF trading tips, the ETF University section closed with Cinthia Murphy leading a panel of ETF Strategists or soon-to-be ETF Strategists (John Davi, Lisa Kirschner, and Shana Orczyk Sissel) who reviewed their approach to sorting through the universe of 3,000 ETFs, the role alternatives can play in a traditional portfolio, and the efficiencies found by using ETFs. | For example, managed futures ETFs, like the iMGP DBi Managed Futures Strategy ETF (DBMF), surged in popularity, as did ultra-short duration Treasury products. I had the pleasure of being on stage a few times but tried to soak in as much as possible over the conference. I left the industry and media track, which included a meet-the-press panel with some of my favorite reporters and a regulatory panel with the behind-the-scenes lawyers. | 7051640f-6347-43ca-812d-429d75d5fc6f |
708744.0 | 2023-02-07 00:00:00 UTC | Andrew Beer, Doug Fincher: Allocating to Liquid Alts Can’t be Timed | DBMF | https://www.nasdaq.com/articles/andrew-beer-doug-fincher%3A-allocating-to-liquid-alts-cant-be-timed | nan | nan | Liquid alternatives resurfaced top of mind as a bright spot last year when both stocks and bonds struggled.
Now, many advisors are understandably feeling like they missed the opportunity to carve out a portfolio of client portfolios to allocate to liquid alts ETFs. However, according to the industry experts, the funds’ best use case is as a buy and hold investment, making now an ideal time for advisors to begin those conversations with clients.
On Tuesday at Exchange: An ETF Experience, a panel of hedge fund experts discussed how advisors can navigate adding liquid alts to client portfolios and how to have the best conversations.
Doug Fincher, portfolio manager at Ionic Capital Management, said at Exchange some of the products in the inflation hedging space have led to disastrous investor experiences in the past, so enhanced communication between advisors and end clients is crucial.
When considering an allocation to a liquid alts fund, Fincher said, “you have to be able to say [to clients] ‘I think inflation is going to rise. In that case, here's how much money you’re going to make. Or, if I'm wrong, because of the way we structured it, you're going to lose 2%.’”
Fincher, who manages the Ionic Inflation Protection ETF (CPII), said building a message that gives investors comfort and an overview of the experience and product – both the upside and downside -- is key.
“[Managed futures] sounds like it's the ideal thing to try to time because there’s great years, and then kind of nothing years, and then great years,” Andrew Beer, managing member at Dynamic Beta investments, said during the panel. “And so I say, ‘look, if you can time that, there are much better ways to make money.’”
“We have to recognize that nobody knows how to time this stuff, even though it's tempting to think that we can,” Beer added.
Beer, who manages the iMGP DBi Managed Futures Strategy ETF (DBMF), said there needs to be a narrative when it comes to liquid alts, explaining the asset class works as a strategic allocation.
“On my end, I'm arguing you should be setting clients expectations,” Beer said. “You're going to have [managed futures exposure] now. You're going to have it in 10 years. If you're still with me, you're going to have it in 20 years And maybe there'll be some variation and some slight dialing up or down over a period of time, but it's got to be strategic.”
For more coverage of Exchange 2023, please visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Beer, who manages the iMGP DBi Managed Futures Strategy ETF (DBMF), said there needs to be a narrative when it comes to liquid alts, explaining the asset class works as a strategic allocation. However, according to the industry experts, the funds’ best use case is as a buy and hold investment, making now an ideal time for advisors to begin those conversations with clients. On Tuesday at Exchange: An ETF Experience, a panel of hedge fund experts discussed how advisors can navigate adding liquid alts to client portfolios and how to have the best conversations. | Beer, who manages the iMGP DBi Managed Futures Strategy ETF (DBMF), said there needs to be a narrative when it comes to liquid alts, explaining the asset class works as a strategic allocation. Now, many advisors are understandably feeling like they missed the opportunity to carve out a portfolio of client portfolios to allocate to liquid alts ETFs. On Tuesday at Exchange: An ETF Experience, a panel of hedge fund experts discussed how advisors can navigate adding liquid alts to client portfolios and how to have the best conversations. | Beer, who manages the iMGP DBi Managed Futures Strategy ETF (DBMF), said there needs to be a narrative when it comes to liquid alts, explaining the asset class works as a strategic allocation. Doug Fincher, portfolio manager at Ionic Capital Management, said at Exchange some of the products in the inflation hedging space have led to disastrous investor experiences in the past, so enhanced communication between advisors and end clients is crucial. “[Managed futures] sounds like it's the ideal thing to try to time because there’s great years, and then kind of nothing years, and then great years,” Andrew Beer, managing member at Dynamic Beta investments, said during the panel. | Beer, who manages the iMGP DBi Managed Futures Strategy ETF (DBMF), said there needs to be a narrative when it comes to liquid alts, explaining the asset class works as a strategic allocation. Doug Fincher, portfolio manager at Ionic Capital Management, said at Exchange some of the products in the inflation hedging space have led to disastrous investor experiences in the past, so enhanced communication between advisors and end clients is crucial. When considering an allocation to a liquid alts fund, Fincher said, “you have to be able to say [to clients] ‘I think inflation is going to rise. | 1ebe217a-2402-49bd-b62d-79ae019918da |
708745.0 | 2023-02-06 00:00:00 UTC | Astronomy, or How to Identify ETF Rising Stars | DBMF | https://www.nasdaq.com/articles/astronomy-or-how-to-identify-etf-rising-stars | nan | nan | Just days since the SPDR S&P 500 ETF (SPY) celebrated its 30th birthday, investors may be looking around the booming world of ETFs to find the next billion-dollar idea or strategy. One way to scrutinize and identify the right ETF may be looking at advisor habits and the trends they’re looking at this year. For VettaFi’s editor-in-chief Lara Crigger, that begins and ends with data in her presentation “Tickers, Themes, and Trends, Oh My!” at the Exchange ETFs conference in Miami.
At VettaFi, the proprietary metric to identify and quantify research trends is advisor engagement. To do that, VettaFi puts together webcasts, including surveys and polling data across ETF Trends, ETF Database, and Advisor Perspectives, to create a broad and deep sandbox for advisors to do their due diligence research.
“We're looking for patterns in the short and the long term because those patterns are going to become trends,” Crigger said.
Crigger shared an anecdote from her time as a professional astronomer looking for extrasolar planets, relating how astronomers take their telescopes and point them at the stars for a very long time, waiting for just the slightest blips.
“In those blips, suddenly, it becomes a pattern. And in that pattern, there’s a whole world waiting to be discovered. When I think of advisor engagement data, it’s just as powerful and just as informative of a data set in finding the signal in the noise as finding a whole world.”
Looking at examples in the data, Crigger pointed out trends in asset classes -- for example, interest in international equities recently hit its highest point since the onset of the Russia-Ukraine war last Spring. At the same time, research into commodities hit its lowest point in more than a year, despite food prices rising.
“Advisors are looking at the market right now and asking, is this the time? Are valuations attractive enough to get back in a more meaningful way into these markets?” Crigger said of those two areas.
VettaFi looks to ETFs with the most engagement, as well, which may often line up with the most traded names but occasionally offers some surprises. In 2022, the tanking tech sector kept investors on their toes, with investors sticking around in the Nasdaq rubbernecking, with income a major theme as well, Crigger explained, pointing out the solid year for the JPMorgan Equity Premium Income ETF (JEPI).
“At one point, JEPI had a return of 14%, which is astonishing, so it makes sense why JEPI was the belle of the ball last year,” Crigger said.
What’s trending now? The data shows that JEPI and equity income continue to be major solutions to the problem of providing client income, with the strategy being the poster child for the broader push for income.
The Invesco Solar ETF (TAN), with the highest five-year return of more than 3,000 ETFs tracked by VettaFi, also stood out as a performance story. The SPDR Gold Shares ETF (GLD), meanwhile, has seen a rally as investors have shifted to a more defensive posture.
But while those may be today’s big names, it’s in finding “The Rising ETF Stars” in which engagement can be such a powerful tool, Crigger explained, adding that, like for astronomers, it’s in the movement of the light where the most powerful data can be found.
So while not every emerging trend will last, metrics like year-over-year engagement changes can be telling. For example, managed futures have stood out, with the iMGP DBi Managed Futures Strategy ETF (DBMF)
up 913% y-o-y in engagement, and the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM)
up 471%.
The Fed’s actions instigating a choppy market have also driven investors to ultra-short duration treasuries in strategies like the WisdomTree Floating Rate Treasury Fund (USFR), which saw engagement up 338% y-o-y.
Perhaps the most interesting trend, Crigger said, were strategies like the Core Alternative ETF
(CCOR) and the ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) with 392% and 195% engagement spikes y-o-y, active strategies that reflect a “for advisers, by advisers” mentality in which advisors package strategies from SMAs, for example.
What about so far in 2023? International ETFs, especially in the Eurozone and ex-U.S. strategies, are in the top ten based on month-over-month engagement (m-o-m) with the iShares MSCI Eurozone ETF (EZU) and the SPDR EURO STOXX 50 ETF (FEZ) up 183% and 131% while the iShares MSCI ACWI ex U.S. ETF
(ACWX) was up 121% in m-o-m engagement.
Adding a particular wrinkle to gold, while GLD was up significantly last year, the SPDR Gold MiniShares Trust
(GLDM) is up 92% m-o-m so far this year, with its smaller gold allotment a key factor, Crigger said.
“Retail investors, of course, but also advisors who might be thinking about trying to allocate a little chunk of their clients portfolios to a strategy that can work in the long term. GLDM also charges a smaller expense ratio than GLD,” she said, explaining that its smaller gold-per-share allotment takes the handle of funds from around $170 per share to around $30 or $40 per share.
VettaFi’s ETF lists, Crigger said, highlight the most intriguing themes being researched right now. In 2022, bond ETFs and dividend ETFs were among the top lists, with dividend ETFs the highest. Crude oil ETFs and Aerospace and Defense ETFs may have benefitted from geopolitical events, while market volatility and single stock ETFs drew in interest in leveraged and inverse ETFs.
In 2023? The top list is now gold ETFs, followed by dividend ETFs, bond ETFs, and India and China ETFs separately as emerging markets look to rebound. With VettaFi’s website, Crigger said, those tools and the whole of the ETF Database suite is available.
For more coverage of the Exchange conference, please visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For example, managed futures have stood out, with the iMGP DBi Managed Futures Strategy ETF (DBMF) up 913% y-o-y in engagement, and the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) up 471%. For VettaFi’s editor-in-chief Lara Crigger, that begins and ends with data in her presentation “Tickers, Themes, and Trends, Oh My!” at the Exchange ETFs conference in Miami. The SPDR Gold Shares ETF (GLD), meanwhile, has seen a rally as investors have shifted to a more defensive posture. | For example, managed futures have stood out, with the iMGP DBi Managed Futures Strategy ETF (DBMF) up 913% y-o-y in engagement, and the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) up 471%. In 2022, the tanking tech sector kept investors on their toes, with investors sticking around in the Nasdaq rubbernecking, with income a major theme as well, Crigger explained, pointing out the solid year for the JPMorgan Equity Premium Income ETF (JEPI). In 2022, bond ETFs and dividend ETFs were among the top lists, with dividend ETFs the highest. | For example, managed futures have stood out, with the iMGP DBi Managed Futures Strategy ETF (DBMF) up 913% y-o-y in engagement, and the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) up 471%. Perhaps the most interesting trend, Crigger said, were strategies like the Core Alternative ETF (CCOR) and the ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) with 392% and 195% engagement spikes y-o-y, active strategies that reflect a “for advisers, by advisers” mentality in which advisors package strategies from SMAs, for example. International ETFs, especially in the Eurozone and ex-U.S. strategies, are in the top ten based on month-over-month engagement (m-o-m) with the iShares MSCI Eurozone ETF (EZU) and the SPDR EURO STOXX 50 ETF (FEZ) up 183% and 131% while the iShares MSCI ACWI ex U.S. ETF (ACWX) was up 121% in m-o-m engagement. | For example, managed futures have stood out, with the iMGP DBi Managed Futures Strategy ETF (DBMF) up 913% y-o-y in engagement, and the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) up 471%. “Advisors are looking at the market right now and asking, is this the time? What’s trending now? | 11df71a6-b443-4830-9f26-0e145cea6aea |
708746.0 | 2023-02-05 00:00:00 UTC | Crigger and Rosenbluth Discuss Trends in the ETF Industry & FA Behavior | DBMF | https://www.nasdaq.com/articles/crigger-and-rosenbluth-discuss-trends-in-the-etf-industry-fa-behavior | nan | nan | While 2022 was a rocky year for markets, it was a big year for the ETF industry: ETFs took in more than $800 billion in flows last year, marking the second-best year ever for ETFs.
Within the new money entering ETFs, several trends emerged: record inflows went into fund segments, including active equity, U.S. value, and smart beta, Todd Rosenbluth, head of research at VettaFi, said during a panel on Sunday at Exchange: An ETF Experience.
Several new entrants emerged in 2022, which included Capital Group, DoubleLine, Morgan Stanley, Matthews Asia, and Neuberger Berman. And mutual fund to ETF conversions, an emerging trend in recent years, were also rampant, with conversions from Dimensional Funds, Goldman Sachs Asset Management, Harbor Capital Advisors, and JPMorgan Asset Management entering the market.
"Quite a few of these trends are continuing into this year," Lara Crigger, Editor-in-Chief at VettaFi, said at Exchange. "I don't think we're going to see any slowdown in mutual fund issuers trying to carve out space for themselves in the ETF industry."
According to Rosenbluth and Crigger, behavioral trends have also shifted among financial advisors in the past year. Notably, all the top-researched funds per VettaFi data outperformed their FactSet categories. "Performance was a really big factor in terms of what people engage with, what drives research," Crigger said.
With that in mind, naturally, financial advisors researched and engaged the most with alternative strategies, particularly managed futures, in 2022.
"Managed futures, of course, were the best performing category," Crigger said, pointing to the iMGP DBi Managed Futures Strategy ETF (DBMF), which surged in popularity last year and took in considerable flows.
Advisors also looked to ultra-short duration Treasuries ETFs as they looked to boost protection and minimize risk last year. Options-based ETFs that could provide income were also top of mind, and tactical plays, especially in defense and real estate, surged in interest.
Other major behavioral trends observed last year include commodities seeing a massive research spike with the onset of the Russia-Ukraine war and peaking inflation, investors returning to fixed income as rates rose, and the strong dollar bringing international equities into clear focus.
For more coverage of Exchange 2023, please visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | "Managed futures, of course, were the best performing category," Crigger said, pointing to the iMGP DBi Managed Futures Strategy ETF (DBMF), which surged in popularity last year and took in considerable flows. Several new entrants emerged in 2022, which included Capital Group, DoubleLine, Morgan Stanley, Matthews Asia, and Neuberger Berman. Options-based ETFs that could provide income were also top of mind, and tactical plays, especially in defense and real estate, surged in interest. | "Managed futures, of course, were the best performing category," Crigger said, pointing to the iMGP DBi Managed Futures Strategy ETF (DBMF), which surged in popularity last year and took in considerable flows. While 2022 was a rocky year for markets, it was a big year for the ETF industry: ETFs took in more than $800 billion in flows last year, marking the second-best year ever for ETFs. And mutual fund to ETF conversions, an emerging trend in recent years, were also rampant, with conversions from Dimensional Funds, Goldman Sachs Asset Management, Harbor Capital Advisors, and JPMorgan Asset Management entering the market. | "Managed futures, of course, were the best performing category," Crigger said, pointing to the iMGP DBi Managed Futures Strategy ETF (DBMF), which surged in popularity last year and took in considerable flows. While 2022 was a rocky year for markets, it was a big year for the ETF industry: ETFs took in more than $800 billion in flows last year, marking the second-best year ever for ETFs. Within the new money entering ETFs, several trends emerged: record inflows went into fund segments, including active equity, U.S. value, and smart beta, Todd Rosenbluth, head of research at VettaFi, said during a panel on Sunday at Exchange: An ETF Experience. | "Managed futures, of course, were the best performing category," Crigger said, pointing to the iMGP DBi Managed Futures Strategy ETF (DBMF), which surged in popularity last year and took in considerable flows. And mutual fund to ETF conversions, an emerging trend in recent years, were also rampant, with conversions from Dimensional Funds, Goldman Sachs Asset Management, Harbor Capital Advisors, and JPMorgan Asset Management entering the market. With that in mind, naturally, financial advisors researched and engaged the most with alternative strategies, particularly managed futures, in 2022. | 45d1dd8f-df86-492c-a8d5-49a9fac3dcb7 |
708747.0 | 2023-02-02 00:00:00 UTC | Most Americans Predict Volatility in 2023: Hedge With DBMF | DBMF | https://www.nasdaq.com/articles/most-americans-predict-volatility-in-2023%3A-hedge-with-dbmf | nan | nan | 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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 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. 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. | 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. 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. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | 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. | 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. 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. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | 0d32f052-ca2c-4f90-b557-52aced754774 |
708748.0 | 2023-01-30 00:00:00 UTC | Invest for Volatility in the Near Term With DBMF | DBMF | https://www.nasdaq.com/articles/invest-for-volatility-in-the-near-term-with-dbmf | nan | nan | Global asset managers and banks have consistently issued caution in their 2023 outlooks as they anticipate developed market central bank policies to exacerbate many of the challenges of 2022. While individual analysis of asset classes and countries varies, the consistent messaging is that volatility is likely here to stay.
“There is good and bad news for equity markets and more broadly risky asset classes in 2023. The good news is that central banks will likely be forced to pivot and signal cutting interest rates sometime next year, which should result in a sustained recovery of asset prices and subsequently the economy by the end of 2023,” said Marko Kolanovic, chief global markets strategist and co-head of global research at JPMorgan in a 2023 market outlook. “The bad news is that in order for that pivot to happen, we will need to see a combination of more economic weakness, an increase in unemployment, market volatility, decline in levels of risky assets and a fall in inflation.”
This volatility isn’t just forecast for the near term, however, but is part of a larger continuing regime shift.
“The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us. The new regime of greater economic and market volatility is playing out – and not going away, in our view,” wrote BlackRock in its 2023 outlook.
Goldman Sachs takes a somewhat optimistic but cautioned outlook for the year based on two scenario possibilities: either the U.S. narrowly avoids recession and risk assets benefit, or the U.S. enters a mild recession followed by a strong stock rally similar to what has been seen in previous economic downturns.
“Our base case implies financial markets can regain traction in 2023. In equities, we see more paths to gains than losses by year-end. Bonds are also expected to rise, as today’s higher yields provide an ample cushion to absorb any further increase in interest rates. But there will no doubt be curves along the road ahead," Goldman Sachs wrote in its 2023 outlook.
Even in this more hopeful outlook for U.S. equities by year’s end, there is a high degree of implied volatility and a massive shift in market trends in the second half of the year. All of these are things that managed futures strategies capitalize on, making them a worthwhile consideration within portfolios in both the near term and the longer term.
Investing 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.
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.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 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. Investing for Volatility With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. | Investing 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. | Investing 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. | Investing for Volatility With DBMF Managed futures strategies largely offered strong performance last year, capitalizing on market volatility and dislocations. 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. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been an immensely popular choice for advisors and investors alike in the last year. | 7c04f774-cb58-4056-8b04-6827bcf66142 |
708749.0 | 2023-01-23 00:00:00 UTC | Markets Bet on Historic Inflation Reversal: DBMF Captures Trends | DBMF | https://www.nasdaq.com/articles/markets-bet-on-historic-inflation-reversal%3A-dbmf-captures-trends | nan | nan | Markets are riding on the bet that inflation will not just fall this year, but will do so at a historic rate, according to the WSJ. Whether that bet plays out or not, managed futures strategies that capture market trends as they happen are potentially positioned for another year of compelling performance in 2023 as recession risk rises and economic slowing likely begins in earnest.
December’s CPI report has renewed the hope in the minds of many investors that inflation has peaked and will fall rapidly back to the 2% bounds that the Federal Reserve is aiming for. For that to happen this year would mean prices fall as rapidly as they did during the depression that came in the wake of the 2008 Financial Crisis.
Treasury yields for notes set to mature in January 2024 were around 4.7% at the close on Friday with TIPS maturing during the same period and yielding 2.7%. Within derivatives, bets on CPI swaps that allow investors to express their views on future inflation rates were largely estimating 2.1% inflation in the next 12 months.
Inflation has only fallen that rapidly two times in the last half-century: the recession that occurred between August 2008 and July 2009, and in the early 1980s when Fed Chair Paul Volcker hiked interest rates into the double digits to fight soaring inflation.
“We don’t believe that 2% is a feasible target right now,” Monica Defend, head of Amundi’s research institute, told WSJ.
Managed Futures Capture Trends
Given that inflation bets in the last 18 months have persistently missed reality (underestimating the speed of price increases), there is a wealth of opportunity for strategies like managed futures to capture and capitalize on the gap between prospective outcomes and market realities and trends.
The iMGP DBi Managed Futures Strategy ETF (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 has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF has management fees of 0.85%. Whether that bet plays out or not, managed futures strategies that capture market trends as they happen are potentially positioned for another year of compelling performance in 2023 as recession risk rises and economic slowing likely begins in earnest. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF has management fees of 0.85%. Whether that bet plays out or not, managed futures strategies that capture market trends as they happen are potentially positioned for another year of compelling performance in 2023 as recession risk rises and economic slowing likely begins in earnest. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF has management fees of 0.85%. Whether that bet plays out or not, managed futures strategies that capture market trends as they happen are potentially positioned for another year of compelling performance in 2023 as recession risk rises and economic slowing likely begins in earnest. | The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. DBMF has management fees of 0.85%. Whether that bet plays out or not, managed futures strategies that capture market trends as they happen are potentially positioned for another year of compelling performance in 2023 as recession risk rises and economic slowing likely begins in earnest. | c7b1f85c-ec8e-4a0b-9d79-b56cf3a258eb |
708750.0 | 2023-01-23 00:00:00 UTC | SPY Has Aged Well for 30 Despite So Many Grandkids | DBMF | https://www.nasdaq.com/articles/spy-has-aged-well-for-30-despite-so-many-grandkids | nan | nan | On Sunday, a select few of us in the ETF industry will be toasting the 30th anniversary of the SPDR S&P 500 ETF (SPY), the first U.S.-listed and still-largest ETF. However, millions of Americans will unknowingly be among the beneficiaries of the major milestone.
The first ETF began trading in Canada in 1990, but most will agree that the birth of SPY on January 22, 1993, helped propel the ETF industry’s global growth. While it took some time and weakness in the financial markets for ETFs to become mainstream, there is now approximately $7 trillion in assets spread across more than 3,000 U.S. ETFs, aided by back-to-back impressive years of net inflows. Many advisors have built strategies using only ETFs, and there is a collection of experienced and passionate VettaFi Voices eager to help them.
VettaFi is going to have a proper celebration with more than 1,000 of our closest financial advisors and ETF industry friends in a few weeks at Exchange in Miami. But I asked Matt Bartolini, head of SPDR Americas Research, to share some statistics about SPY, which remains the granddaddy of all ETFs. Here are some of my favorites as well as some perspective from me on the data:
SPY has had $110 trillion of total trading volume since inception.
SPY recently had $372 billion in assets. While many buy and hold SPY, the ETF is frequently used for shorter-term purposes.
SPY traded more than $9.7 trillion in 2022, making it the most traded ETF. SPY accounted for 21% of the record U.S. ETF volume.
SPY’s total trading volume in 2022 was 15 times more than that of the iShares S&P 500 ETF (IVV) and 18 times more than that of the Vanguard S&P 500 ETF (VOO).
Over the last five years, VOO, IVV, and the SPDR Portolio S&P 500 ETF (SPLG) had net inflows of $134 billion, $79 billion, and $13 billion respectively, while SPY had $16 billion of net outflows.
SPY’s net expense ratio of 0.09% is three times that of these ETFs. Despite losing some market share at the asset level, SPY remains the go-to vehicle for many.
SPY, on average, trades more than its top seven index constituents combined, including Apple, Amazon.com, and Microsoft.
While what is inside the ETF is the driver of its performance, there is tremendous liquidity in the basket of stocks in the S&P 500.
Over the last three decades, the ETF industry has provided investors, large and small, with many additional ways to access financial markets we take for granted. Some of these are the offspring for SPY, and it is a lineage worthy of pride.
For example, there is a wide range of ETFs tied the S&P 500 Index, including sector-focused funds like the Technology Select Sector SPDR (XLK), style-oriented funds like the iShares S&P 500 Growth ETF (IVW), factor-based funds like the Invesco S&P 500 Low Volatility ETF (SPLV), ESG-screened funds like the Xtrackers S&P 500 ESG ETF (SNPE), and many more.
Meanwhile, thanks to SPY, investors can gain access to international equity markets that are closed for the day when the ETF trading in the U.S. occurs, including funds like the KraneShares CSI China Internet ETF (KWEB) and the WisdomTree India Earnings Fund (EPI).
For those wanting to outperform SPY, despite the challenges, there are now hundreds of actively managed ETFs to consider, including many from firms long associated with the mutual fund world, such as ETFs like the American Century Focused Large Cap Value ETF (FLV) and the T. Rowe Price Blue Chip Growth ETF (TCHP). Indeed, it is hard to think of an asset management firm that does not have an ETF presence.
Not to mention that ETF investors get the benefits of trading on an exchange a portfolio of securities like high yield bonds (through funds like the SPDR Bloomberg High Yield Bond ETF (JNK)), gold (through an ETF like the SPDR Gold Shares (GLD)), and even ones investing in futures like the iMGP DBi Managed Futures Strategy ETF (DBMF).
I could list ETF innovations from now until SPY turns 30 years old. But I want to get ready to celebrate, and you should too.
To learn more about the event and register, please visit the Exchange website.
For more news, information, and analysis, visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Not to mention that ETF investors get the benefits of trading on an exchange a portfolio of securities like high yield bonds (through funds like the SPDR Bloomberg High Yield Bond ETF (JNK)), gold (through an ETF like the SPDR Gold Shares (GLD)), and even ones investing in futures like the iMGP DBi Managed Futures Strategy ETF (DBMF). VettaFi is going to have a proper celebration with more than 1,000 of our closest financial advisors and ETF industry friends in a few weeks at Exchange in Miami. But I asked Matt Bartolini, head of SPDR Americas Research, to share some statistics about SPY, which remains the granddaddy of all ETFs. | Not to mention that ETF investors get the benefits of trading on an exchange a portfolio of securities like high yield bonds (through funds like the SPDR Bloomberg High Yield Bond ETF (JNK)), gold (through an ETF like the SPDR Gold Shares (GLD)), and even ones investing in futures like the iMGP DBi Managed Futures Strategy ETF (DBMF). Over the last five years, VOO, IVV, and the SPDR Portolio S&P 500 ETF (SPLG) had net inflows of $134 billion, $79 billion, and $13 billion respectively, while SPY had $16 billion of net outflows. For example, there is a wide range of ETFs tied the S&P 500 Index, including sector-focused funds like the Technology Select Sector SPDR (XLK), style-oriented funds like the iShares S&P 500 Growth ETF (IVW), factor-based funds like the Invesco S&P 500 Low Volatility ETF (SPLV), ESG-screened funds like the Xtrackers S&P 500 ESG ETF (SNPE), and many more. | Not to mention that ETF investors get the benefits of trading on an exchange a portfolio of securities like high yield bonds (through funds like the SPDR Bloomberg High Yield Bond ETF (JNK)), gold (through an ETF like the SPDR Gold Shares (GLD)), and even ones investing in futures like the iMGP DBi Managed Futures Strategy ETF (DBMF). For example, there is a wide range of ETFs tied the S&P 500 Index, including sector-focused funds like the Technology Select Sector SPDR (XLK), style-oriented funds like the iShares S&P 500 Growth ETF (IVW), factor-based funds like the Invesco S&P 500 Low Volatility ETF (SPLV), ESG-screened funds like the Xtrackers S&P 500 ESG ETF (SNPE), and many more. For those wanting to outperform SPY, despite the challenges, there are now hundreds of actively managed ETFs to consider, including many from firms long associated with the mutual fund world, such as ETFs like the American Century Focused Large Cap Value ETF (FLV) and the T. Rowe Price Blue Chip Growth ETF (TCHP). | Not to mention that ETF investors get the benefits of trading on an exchange a portfolio of securities like high yield bonds (through funds like the SPDR Bloomberg High Yield Bond ETF (JNK)), gold (through an ETF like the SPDR Gold Shares (GLD)), and even ones investing in futures like the iMGP DBi Managed Futures Strategy ETF (DBMF). VettaFi is going to have a proper celebration with more than 1,000 of our closest financial advisors and ETF industry friends in a few weeks at Exchange in Miami. SPY traded more than $9.7 trillion in 2022, making it the most traded ETF. | 2c2a0f20-5ced-4312-90c8-c07d1954e01c |
708751.0 | 2023-01-17 00:00:00 UTC | ETF Prime: The Rising Stars of 2022 | DBMF | https://www.nasdaq.com/articles/etf-prime%3A-the-rising-stars-of-2022 | nan | nan | On the latest episode of ETF Prime, host Nate Geraci was joined by VettaFi’s editor-in-chief Lara Crigger and chief product and innovation officer Tom Hendrickson to highlight 2022’s ETF rising stars. George Noble explained the Noble Absolute Return ETF (NOPE). For the final segment, NYSE’s Mo Sparks and Trackinsight’s Robert Jaeger discussed their new collaboration, ETF Central.
Taking a moment to discuss the strategic partnership between VettaFi and TMX, Hendrickson applauded the cultural alignment between the firms, noting that the $175 million dollar investment “allows us to do more, faster.” Though VettaFi is still less than a year old, Hendrickson pointed out that there are decades of experience under the VettaFi umbrella. The partnership with TMX adds fuel to VettaFi’s fire. Hendrickson said, “we know there is a heck of a lot of work to do, the opportunity is huge, but it's great to be on that journey together with them.”
Last week, Crigger published the top ten rising stars of 2022 which leaned on VettaFi’s bespoke data to list the ten ETFs that saw the most year over year advisor engagement increases.
According to Hendrickson, “there’s a lot of innovation around how we think about advisor engagement.” The data in the article focuses on funds about $100 million AUM (since that is the threshold for most ETFs to appear on most advisor platforms).
The Rising Stars #6-10
Coming in at number 10 on the list was the Invesco Aerospace & Defense ETF (PPA) with 173% increase. Number nine was the Direxion Daily Real Estate Bear 3X Shares (DRV) which saw 178%. Numbers eight and seven were the ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) and the Simplify Interest Rate Hedge ETF (PFIX) which both clocked in at 195%, and number six was the WisdomTree Floating Rate Treasury Fund (USFR) with an engagement spike of 338%.
“What stands out to me about these first five ETFs on the list is that they are frankly very defensive plays,” Crigger said, noting that though defensive, these funds aren’t reactive. She observed that PPA became extremely popular when Russia invaded Ukraine. She also offered that both PFIX and USFR are funds that are useful for advisors who want to position their clients for markets that are roiled by chaos.
USFR took over 11 billion in assets last year. “We saw a lot of interest around USFR on the platform throughout the year,” Crigger said. “We covered it quite a bit.” Despite that, it slid under the radar for many.
Rising Stars Top 5
The funds that topped the advisor engagement list included, at number five, the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) at 349%. The iShares Treasury Floating Rate Bond ETF (TFLO) with 375% took the number four spot while the Core Alternative ETF (CCOR) came in at number three with a 392% boost in engagement year over year. The number two fund was the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) with a 471% increase. The rising star of the year, however, was the tremendous 913% jump that the iMGP DBi Managed Futures Strategy ETF (DBMF) took in on the heels of its incredible performance.
“Obviously the story of 2022 is managed futures,” Crigger offered. “They were just the runaway hits of last year.” Given the rising inflation and rates, and the attention alts experienced, Crigger doesn’t think it's surprising that managed futures had their moment. “Managed futures were far and away the best performing of the alts category.” KLML and DBMF had an outperformance of the broader market by upwards of 40%, according to Crigger, who wouldn’t be surprised to see that success carry through into 2023.
Hendrickson concurred, adding, “the death of the 60/40 was an interesting subtext when we look at this group.” He noted that there has been a ton of innovation in the ETF space that gives advisors a greater scope of tools with which to engage the market, potentially creating some blurriness in the diagram of the 60/40.
CCOR surprised Geraci, who confessed it was off his radar entirely prior to seeing it on the list, but it fits in given its “core alternative” strategy. Geraci noted it is effectively an equity income play. All of the funds on the list had solid years, with CCOR up 3% last year. DBFM was up 22% and KMLM hit 24%. “Performance and engagement go hand to hand,” Geraci said after sharing that none of the funds on this list saw negative returns.
Exchange Special Offer
With VettaFi’s Exchange conference just around the corner on February 5th through February 8th, Geraci offered the special code “Prime” to ETF Prime listeners.
The code provides a discounted registration fee for advisors who are part of the ETF Prime community, bringing the price down from $300 to just $99.
Hendrickson added that anyone who registers over the next 72 hours will receive a free night’s stay at the iconic Fontainebleau Miami Beach Hotel that is hosting the conference.
Noble Impact Capital on NOPE
With over four decades of experience, George Noble has a storied finance career and has witnessed numerous cycles firsthand. After reflecting on his recent turn as a Twitter Spaces FinTwit Personality, Geraci and Noble turned to Noble Impact Capital’s fund the Noble Absolute Return ETF (NOPE). With a tagline of “NOPE to passive investing, NOPE to ignoring valuations, and NOPE to asset bubbles,” the fund’s philosophy can be found in its ticker.
“It was not my intention to start another fund,” Noble confessed, continuing, “then along came Twitter spaces and I kind of backed into it.” Looking around at the ETF space, which is 99% passive and considering what he believes to be a regime change, Noble’s rising FinTwit status gave him the opportunity to raise capital for a fund that could fill a niche. “I thought my skillset that I’ve amassed the last four decades could be useful in this market environment,” he told Geraci.
NOPE seeks to change exposures over the cycle and generate absolute positive returns over the cycle, according to Noble. “Not every day is going to be up, not every week is going to be up, but I think we’re in a fantastic era right now for active managers,” Nobled offered.
The fund’s holdings currently short Tesla, Robinhood, and Coinbase and have a large cash position in SPDR Bloomberg 1-3 Month T-Bill ETF (BIL). “I remain negative on markets, in general,” Noble said.
ETF Central
NYSE’s Mo Sparks and Trackinsight’s Robert Jaeger rolled out a brand-new ETF platform, ETF Central. The goal is to educate investors through data, analytics, and news content.
Sparks said, “we’re consistently trying to find ways to deliver value back to our clients and the ETF ecosystem at large.” Sparks sees ETF Central has a platform that can connect end investors to content, collateral, and perspectives from issuers. “Its been a multi-year journey for us,” Sparks said, discussing the content that NYSE has created over the years with creators like Geraci and with VettaFi and the need to create a central platform for it. Thus, ETF Central was born. Sparks hopes ETF Central can be a destination site for market participants. “Its education, education, education.”
Jaeger comes in from Trackinsight, which was founded in France in 2014. They hope to work with ETF Central and other hubs around the world to further democratize the ETF wrapper. Jaeger said, “we launched ETF Central with a few overarching goals – the first is that it had a best in class user experience.”
Listen to the entire ETF Prime conversation here:
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For more ETF Prime podcast episodes, visit our ETF Prime channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “Managed futures were far and away the best performing of the alts category.” KLML and DBMF had an outperformance of the broader market by upwards of 40%, according to Crigger, who wouldn’t be surprised to see that success carry through into 2023. The rising star of the year, however, was the tremendous 913% jump that the iMGP DBi Managed Futures Strategy ETF (DBMF) took in on the heels of its incredible performance. Hendrickson concurred, adding, “the death of the 60/40 was an interesting subtext when we look at this group.” He noted that there has been a ton of innovation in the ETF space that gives advisors a greater scope of tools with which to engage the market, potentially creating some blurriness in the diagram of the 60/40. | The rising star of the year, however, was the tremendous 913% jump that the iMGP DBi Managed Futures Strategy ETF (DBMF) took in on the heels of its incredible performance. “Managed futures were far and away the best performing of the alts category.” KLML and DBMF had an outperformance of the broader market by upwards of 40%, according to Crigger, who wouldn’t be surprised to see that success carry through into 2023. Rising Stars Top 5 The funds that topped the advisor engagement list included, at number five, the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) at 349%. | The rising star of the year, however, was the tremendous 913% jump that the iMGP DBi Managed Futures Strategy ETF (DBMF) took in on the heels of its incredible performance. “Managed futures were far and away the best performing of the alts category.” KLML and DBMF had an outperformance of the broader market by upwards of 40%, according to Crigger, who wouldn’t be surprised to see that success carry through into 2023. Hendrickson said, “we know there is a heck of a lot of work to do, the opportunity is huge, but it's great to be on that journey together with them.” Last week, Crigger published the top ten rising stars of 2022 which leaned on VettaFi’s bespoke data to list the ten ETFs that saw the most year over year advisor engagement increases. | The rising star of the year, however, was the tremendous 913% jump that the iMGP DBi Managed Futures Strategy ETF (DBMF) took in on the heels of its incredible performance. “Managed futures were far and away the best performing of the alts category.” KLML and DBMF had an outperformance of the broader market by upwards of 40%, according to Crigger, who wouldn’t be surprised to see that success carry through into 2023. The Rising Stars #6-10 Coming in at number 10 on the list was the Invesco Aerospace & Defense ETF (PPA) with 173% increase. | 82d5236e-9900-4ac9-baa6-c994622e6b14 |
708752.0 | 2023-01-17 00:00:00 UTC | DBMF: A Year in Review and a Look Ahead | DBMF | https://www.nasdaq.com/articles/dbmf%3A-a-year-in-review-and-a-look-ahead | nan | nan | Managed futures proved their mettle in 2022 as one of the few strategies to offer positive performance in a challenged year for equities and bonds. The co-portfolio managers of iMGP DBi Managed Futures Strategy ETF (DBMF), one of the top-performing managed futures ETFs of 2022, recently discussed the fund's performance last year and what they are anticipating as 2023 unfolds.
The ability of managed futures to short asset classes via the futures market meant that funds such as DBMF were able to capture the underperformance of equities, treasuries, and more for much of 2022.
“The old inflation playbook – buy gold, TIPS, and real estate – simply did not work this time around. Instead, the ‘new’ inflation trade was to short the yen and Treasuries – something out of the reach of most investors,” explained Mathias Mamou-Mani, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, in a communication to VettaFi.
DBMF ended the year up 0.4% in December while the S&P 500 was down 5.8%. For the entirety of 2022, DBMF had a total return of 21.5% compared to the S&P’s -18.11% total return. It was one of the top-performing funds of the year and an all-star for alternatives, bringing in $1 billion in flows in 2022.
“The inflation trade was contrarian for eighteen months. Managed futures funds rode the wave until it started a sharp reversal in November,” explained Mamou-Mani of the fund’s performance last year.
Predictions for 2023
We’re just half a month into 2023 and already market volatility and uncertainty have proven to be a persistent carry-over from last year. Looking ahead to the rest of the year, Andrew Beer, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, hedges against overly optimistic market outlooks.
“The consensus view today is that this will be easy: inflation will gently fall, the economy will slow but not crash, and the Fed will resurrect the put. Just a reminder that the consensus view has been wrong – really, really wrong – for most of the past two years,” Beer cautioned.
Markets have fluctuated strongly in the first few weeks of the year, driven downwards on news and data of a persistently resilient jobs market and fear of Fed response and then upwards on inflation falling 0.1% month-over-month and hopes that the Fed will ease. For now, concerns around Fed policy remain a primary source of uncertainty in the short term. As to how managed futures and DBMF are positioned, Beer and Mamou-Mani are decidedly more optimistic.
“With the recent market volatility, managed futures funds are hunting for the next big moves, whether up or down. No trend looks obvious in the beginning,” explained Mamou-Mani.
“Ten years of monetary easing and fiscal profligacy won’t be cured in a year. Mistakes will be made, things will break, the impossible will keep happening – and managed futures will be there, waiting for the next big trade,” said Beer.
Positioning for Uncertainty With DBMF
The iMGP DBi Managed Futures Strategy ETF (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).
"I urge to not try to time managed futures: most people who did this missed a decade of alpha in eighteen months. Managed futures should be a core, strategic allocation in all diversified portfolios," explained Beer.
DBMF has management fees of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The co-portfolio managers of iMGP DBi Managed Futures Strategy ETF (DBMF), one of the top-performing managed futures ETFs of 2022, recently discussed the fund's performance last year and what they are anticipating as 2023 unfolds. The ability of managed futures to short asset classes via the futures market meant that funds such as DBMF were able to capture the underperformance of equities, treasuries, and more for much of 2022. Instead, the ‘new’ inflation trade was to short the yen and Treasuries – something out of the reach of most investors,” explained Mathias Mamou-Mani, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, in a communication to VettaFi. | The co-portfolio managers of iMGP DBi Managed Futures Strategy ETF (DBMF), one of the top-performing managed futures ETFs of 2022, recently discussed the fund's performance last year and what they are anticipating as 2023 unfolds. Looking ahead to the rest of the year, Andrew Beer, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, hedges against overly optimistic market outlooks. Positioning for Uncertainty With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | The co-portfolio managers of iMGP DBi Managed Futures Strategy ETF (DBMF), one of the top-performing managed futures ETFs of 2022, recently discussed the fund's performance last year and what they are anticipating as 2023 unfolds. The ability of managed futures to short asset classes via the futures market meant that funds such as DBMF were able to capture the underperformance of equities, treasuries, and more for much of 2022. Instead, the ‘new’ inflation trade was to short the yen and Treasuries – something out of the reach of most investors,” explained Mathias Mamou-Mani, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, in a communication to VettaFi. | The co-portfolio managers of iMGP DBi Managed Futures Strategy ETF (DBMF), one of the top-performing managed futures ETFs of 2022, recently discussed the fund's performance last year and what they are anticipating as 2023 unfolds. As to how managed futures and DBMF are positioned, Beer and Mamou-Mani are decidedly more optimistic. The ability of managed futures to short asset classes via the futures market meant that funds such as DBMF were able to capture the underperformance of equities, treasuries, and more for much of 2022. | d159f78e-10e5-4147-b568-ac320ba4435f |
708753.0 | 2023-01-13 00:00:00 UTC | VettaFi Voices On: Our Favorite Finance Writing | DBMF | https://www.nasdaq.com/articles/vettafi-voices-on%3A-our-favorite-finance-writing | nan | nan | We've been in go-mode at VettaFi, gearing up for Exchange and all the great content and experiences we're putting together, both on stage and off. With education on our brains, today the VettaFi Voices gathered around the watercooler and shared some of their favorite recently published pieces of finance writing.
Todd Rosenbluth, head of research - I want to be reading more books tied to my passion of investing (ideas are welcomed!), but let me recommend two close to our efforts. Eric Balchunas, who is joining me on stage at Exchange, wrote an excellent book called The Bogle Effect on how many ways Jack Bogle and Vanguard impacted the asset management industry. He covers this from many angles and brings fresh insights beyond his traditional ETF work that makes it enjoyable. Plus, he gets takes from many of our industry friends.
Also, Mary Childs wrote a wonderful book on Bill Gross and his time at PIMCO called The Bond King, which dives into the success story of what became the active bond find first in mutual fund form, and then in ETF form. As a former mutual fund analyst, I lived much of this. But I still learned a lot.
I also love the wide range of expertise with our research efforts. I learn something new from Roxanna Swan, Stacey Morris, and Dave Nadig every time they publish.
Two final shout outs. Bob Pisani's book, Shut Up and Keep Talking has amazing stories and shows Bob's personal investment growth cycle, which is also well lined up with the growth of the ETF industry. Bob has been a champion of the ETF industry and was an early adopter for index investing, despite being the key voice for many active managers.
Last and not least, hot off the presses, Lara Crigger dove into the ETFs that really jumped off the page for our advisor community. Some ETFs she highlighted included the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iMGP DBi Managed Futures Strategy ETF (DBMF), WisdomTree Floating Rate Treasury Fund (USFR), and Invesco Aerospace & Defense ETF (PPA). The data is really helpful to understand which funds are top of mind for advisors.
Lara Crigger, editor-in-chief: My ears are burning! Thanks, Todd, but I'd be remiss if I didn't point folks to your work, as well as that by the VettaFi staff writers, including the fantastic Elle Caruso, Karrie Gordon, James Comtois, and Nick Peters-Golden. Together, they are putting together some of the best, most timely ETF-related research and analysis on the web.
I also can't speak highly enough of Kyla Scanlon's economic analyses. Smart, engaging, well-backed by crunchy research -- she's fantastic. Her YouTube channel is a great starting point (I love the billy goat cartoons in "Why The Fed Might Want You To Lose Your Job" and the Very Good Doggo in "The Eggconomy") but she also has a Substack and a podcast, if those media are more your jam.
Dave Nadig, financial futurist: I recommend Kyla's piece on the Vibecession, too. Her ability to be right about the data while simultaneously talking about it like an actual human being is continuously inspiring. Also, she's going to be giving us her best 10 minutes on stage at Exchange as well!
Crigger: I genuinely can't wait! Lastly, I love Samantha Russell's epic Twitter threads on content marketing. Once upon a time, I spent some years as a marketing copywriter, so I always find myself nodding vigorously along to her threads, sometimes pointing at the screen and shouting to nobody in particular, "She gets it!" (It's a good thing I work remotely, heh.)
What other things are you reading, Dave?
Nadig: Well, Mike Green (@ProfPlum99) has fired up his Substack, and his first piece of the year was a banger. On the surface, it’s about energy demand and oil consumption, but then he dives into a few surprising rabbit holes, not the least of which is recent work by Ole Peters (@ole_b_peters) on ergodicity economics. He starts heading in directions I'm excited to explore with him on stage in our Future of Finance discussion at Exchange next month. Here's a juicy quote:
Still, I can’t shake the feeling that our flirtation with Ayn Rand and unfettered “capitalism” (if we can call voracious lobbying of Rome, “capitalism”) is increasingly the cause of our malaise. Perhaps, like George Bailey, we need to go back in time and look at our choices differently. The community may indeed emerge the hero.
Roxanna Islam, associate director of research: I really like this article called The Crypto Story by Bloomberg's Matt Levine. It's much more than an article, though; it was published as a cover-to-cover issue of Bloomberg Businessweek.
Nadig: That piece is absolutely epic, and so well written.
Islam: Also, it's not a specific article, but I'm a fan of anything Jason Zweig from the Wall Street Journal writes. His topics are always timely and easy to understand. While most of those articles are behind a paywall, you can see some of his material here.
Rosenbluth: Let me share some from other smart people. I really enjoyed this piece from Michael Batnick because, although I agree with some points he made and disagree with others, I love the charts he uses. I also enjoy on a daily basis the Indexology blog from S&P Dow Jones Indices, where people like Craig Lazzara use index data in novel ways. This piece on the sectors and style being connected was thought provoking to me.
Islam: One more thing -- last year I started reading more of the resources the CFA Institute publishes. Some of it is members-only, so I can't repost those reports, but they also have some interesting work which anyone can read. I like this report from earlier this past summer on managing risk, and this report from a few days ago on crypto.
Crigger: They also have a great set of blogs highlighting some of their findings. Like Roxanna, I find CFA Institute's work to be fantastic -- their blog is daily morning coffee reading for me. For example, here's a great recent lit review about whether or not the data indicates a trade-off between diversity and investment performance. (Spoiler alert: No, there isn't.)
Islam: On that note, I also recently discovered this blog from the CAIA Association. Lots of articles from great writers are posted there, especially if you're interested in digital assets and other alternatives. (Interesting fact--last year, they actually reposted some articles from both Dave and me!)
Be sure to catch the VettaFi Voices, as well as a host of experts, at Exchange, on February 5–8, 2023, in sunny Miami, Florida. To learn more about the event and register, please visit the Exchange website.
For more news, strategy, and information, please visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Some ETFs she highlighted included the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iMGP DBi Managed Futures Strategy ETF (DBMF), WisdomTree Floating Rate Treasury Fund (USFR), and Invesco Aerospace & Defense ETF (PPA). Thanks, Todd, but I'd be remiss if I didn't point folks to your work, as well as that by the VettaFi staff writers, including the fantastic Elle Caruso, Karrie Gordon, James Comtois, and Nick Peters-Golden. Her YouTube channel is a great starting point (I love the billy goat cartoons in "Why The Fed Might Want You To Lose Your Job" and the Very Good Doggo in "The Eggconomy") but she also has a Substack and a podcast, if those media are more your jam. | Some ETFs she highlighted included the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iMGP DBi Managed Futures Strategy ETF (DBMF), WisdomTree Floating Rate Treasury Fund (USFR), and Invesco Aerospace & Defense ETF (PPA). Also, Mary Childs wrote a wonderful book on Bill Gross and his time at PIMCO called The Bond King, which dives into the success story of what became the active bond find first in mutual fund form, and then in ETF form. Like Roxanna, I find CFA Institute's work to be fantastic -- their blog is daily morning coffee reading for me. | Some ETFs she highlighted included the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iMGP DBi Managed Futures Strategy ETF (DBMF), WisdomTree Floating Rate Treasury Fund (USFR), and Invesco Aerospace & Defense ETF (PPA). Eric Balchunas, who is joining me on stage at Exchange, wrote an excellent book called The Bogle Effect on how many ways Jack Bogle and Vanguard impacted the asset management industry. Also, Mary Childs wrote a wonderful book on Bill Gross and his time at PIMCO called The Bond King, which dives into the success story of what became the active bond find first in mutual fund form, and then in ETF form. | Some ETFs she highlighted included the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), iMGP DBi Managed Futures Strategy ETF (DBMF), WisdomTree Floating Rate Treasury Fund (USFR), and Invesco Aerospace & Defense ETF (PPA). What other things are you reading, Dave? Some of it is members-only, so I can't repost those reports, but they also have some interesting work which anyone can read. | 6013ca24-aac6-4898-b370-fb1e47ed629a |
708754.0 | 2023-01-12 00:00:00 UTC | Top ETF Stories Of 2022 & 2023 Outlook | DBMF | https://www.nasdaq.com/articles/top-etf-stories-of-2022-2023-outlook | nan | nan | (1:00) - 2023 Outlook For ETF Asset Growth
(7:10) - The Rise Of Actively Managed ETFs
(11:00) - Will Investors Continue To Move Away From Mutual Funds?
(14:05) - What Should You Know About Fee Compression Trends?
(17:20) - What New ETFs Were The Favorites In 2022?
(23:40) - ESG vs Anti ESG ETFs
(28:50) - Top ETFs To Watch In 2023
(32:10) - Episode Roundup: VOO, VTI, VOTE
Podcast@Zacks.com
In this episode of ETF Spotlight, I speak with Elisabeth Kashner, Director of Global Fund Analytics at FactSet, about the biggest ETF stories of 2022 and 2023 outlook.
2022 was another great year for the fast-growing ETF industry. US ETFs attracted net inflows of almost $600 billion, the second highest on record, despite continued market turbulence.
Mutual funds, on the other hand, lost assets at a record pace, resulting in a $1.5 trillion gap in the flow of money from them into ETFs, per Bloomberg data.
About 430 new ETFs were introduced last year, slightly lower than record-breaking number of 477 in 2021. New launches included some very interesting strategies like single security ETFs.
Many actively managed ETFs beat their benchmarks in the challenging market conditions and gathered a lot of cash. These included the JPMorgan Equity Premium Income ETF JEPI and the iMGP DBi Managed Futures Strategy ETF DBMF.
Fund managers are also converting some of their mutual funds into ETFs. About 40 mutual funds have been converted into ETFs since Guinness Atkinson started the trend in March 2021, followed by a big move by Dimensional Fund Advisors.
We also discuss fee compression trends, the role of alternative strategies in a portfolio, and the rise of anti-ESG ETFs.
Elisabeth’s favorite ETFs for 2023 include the Vanguard S&P 500 ETF VOO and the Vanguard Total Stock Market ETF VTI. Apple AAPL, Microsoft MSFT and Alphabet GOOGL are the top holdings in these funds.
Tune in to the podcast to learn more. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.
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Vanguard Total Stock Market ETF (VTI): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | These included the JPMorgan Equity Premium Income ETF JEPI and the iMGP DBi Managed Futures Strategy ETF DBMF. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Vanguard Total Stock Market ETF (VTI): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports To read this article on Zacks.com click here. Mutual funds, on the other hand, lost assets at a record pace, resulting in a $1.5 trillion gap in the flow of money from them into ETFs, per Bloomberg data. | These included the JPMorgan Equity Premium Income ETF JEPI and the iMGP DBi Managed Futures Strategy ETF DBMF. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Vanguard Total Stock Market ETF (VTI): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports To read this article on Zacks.com click here. Elisabeth’s favorite ETFs for 2023 include the Vanguard S&P 500 ETF VOO and the Vanguard Total Stock Market ETF VTI. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Vanguard Total Stock Market ETF (VTI): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports To read this article on Zacks.com click here. These included the JPMorgan Equity Premium Income ETF JEPI and the iMGP DBi Managed Futures Strategy ETF DBMF. (23:40) - ESG vs Anti ESG ETFs (28:50) - Top ETFs To Watch In 2023 (32:10) - Episode Roundup: VOO, VTI, VOTE Podcast@Zacks.com In this episode of ETF Spotlight, I speak with Elisabeth Kashner, Director of Global Fund Analytics at FactSet, about the biggest ETF stories of 2022 and 2023 outlook. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Vanguard Total Stock Market ETF (VTI): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports JPMorgan Equity Premium Income ETF (JEPI): ETF Research Reports To read this article on Zacks.com click here. These included the JPMorgan Equity Premium Income ETF JEPI and the iMGP DBi Managed Futures Strategy ETF DBMF. (1:00) - 2023 Outlook For ETF Asset Growth (7:10) - The Rise Of Actively Managed ETFs (11:00) - Will Investors Continue To Move Away From Mutual Funds? | eb1c98cb-a013-4476-b011-391206791b86 |
708755.0 | 2023-01-12 00:00:00 UTC | VettaFi’s Rising ETF Stars of 2022 | DBMF | https://www.nasdaq.com/articles/vettafis-rising-etf-stars-of-2022 | nan | nan | Single-stock leveraged ETFs. Anti-ESG funds. Influencer-backed ETFs. For ETF watchers, 2022 offered plenty of reasons to pop the popcorn and spill one’s hottest takes. But while these ETFs (and more) attracted headlines in 2022, few of them were actually grabbing advisors’ attention — or their clients' dollars.
I can say that with confidence because at VettaFi, we track a proprietary metric known as advisor engagement, which we created to help us suss out trends as they emerge and better understand what financial advisors are researching and why.
While the data nerds here have been tweaking it for years, essentially the metric distills a myriad of inputs into a single numerical measure that sheds daily light on investment research trends, both in the short and long term.
You see, advisors’ research habits can act as a crystal ball for which topics and trends will define markets for the future. To put a fine point on it: Our data suggests that, whether it’s a particular ETF ticker or a category of funds, when advisor engagement rises and falls, flows often follow. That’s not a guarantee, of course, just an observation, one backed up by millions of data points across years of track record. (Plus, the observation makes some intuitive sense: Advisors will tend to conduct deeper research on the ETFs they’re seriously considering allocating to on behalf of their clients.)
Each month, we comb the engagement data to tease out insights for our clients about how the ETF industry is trending. Today, for the first time, I’m going to share a few of those insights publicly.
VettaFi’s Top 10 Rising Stars ETFs of 2022
Below is a table of the 10 ETFs that saw the highest year-over-year increases in advisor engagement. To arrive at this list, I started with the totality of the U.S.-listed ETF market, more than 3,000 ETFs, then whittled down the sample set to include only ETFs with $100 million in assets or more (since that’s the threshold that often unlocks an ETF’s ability to appear on most advisor platforms). I also removed any ETF with a track record shorter than 12 months, or which exhibited statistically insignificant engagement data.
VettaFi's Top 10 Rising Stars of 2022
Ticker Name AUM ($MM) YTD fund flows % Change in Year-over-Year Engagement
iMGP DBi Managed Futures Strategy ETF (DBMF) $927 $967 913%
KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) $263 $269 471%
Core Alternative ETF (CCOR) $593 $321 392%
iShares Treasury Floating Rate Bond ETF (TFLO) $4,339 $4,010 375%
SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) $26,472 $12,890 349%
WisdomTree Floating Rate Treasury Fund (USFR) $13,049 $11,300 338%
Simplify Interest Rate Hedge ETF (PFIX) $384 $114 195%
ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) $320 $55 195%
Direxion Daily Real Estate Bear 3X Shares (DRV) $196 $169 178%
Invesco Aerospace & Defense ETF (PPA) $1,674 $950 173%
Source: VettaFi
I see four big conclusions -- you might see others, and I’d love to hear about them! (Feel free to start the conversation by tagging me on Twitter, @LaraCrigger.)
Advisors Can’t Get Enough of Managed Futures ETFs
Out of the 3,000+ ETFs we track, one fund’s popularity among advisors skyrocketed higher than all the rest in 2022: the iMGP DBi Managed Futures Strategy ETF (DBMF). Engagement for this fund rose an eye-popping 913% over the year, and unsurprisingly, the fund also added $967 million in new net assets.
But DBMF wasn’t alone. Competitor KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) also saw a strong year-over-year engagement increase, rising 471% and adding $269 million in new net assets.
So what’s so special about managed futures?
As inflation and rates rose throughout the year, many alternatives strategies attracted attention as advisors sought refuge in higher-performing, better-yielding alternatives investments to protect and bolster their clients’ portfolios. Among the many options available in the alts space, managed futures were the clear performance standout: DBMF ended 2022 up 13%, while KMLM rose 15%. In contrast, the SPDR S&P 500 ETF Trust (SPY) fell over 19%.
Will managed futures continue to dominate advisors’ mindshare in 2023? Possibly; so far, we’re off to a rip-roaring start. In the meantime, you can keep an eye on developments and trends in the space in our Managed Futures Channel.
In Fixed Income, Don’t Fight the Fed
Investors swung back to bonds big-time last year, with almost $197 billion in new net assets going into U.S.-listed fixed income ETFs in 2022.
Research-wise, financial advisors were most interested in bond ETFs that could maximize safety and minimize duration risk. In practice, that meant 1) Treasuries ETFs, and especially 2) ultra-short-duration or even zero-duration exposures (i.e., floating-rate bonds). If they came in the same package — so much the better.
Source: VettaFi
Over the course of 2022, we saw massive increases in research volumes for the WisdomTree Floating Rate Treasury Fund (USFR), the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), and the iShares Treasury Floating Rate Bond ETF (TFLO), advisor engagement for which rose 338%, 349%, and 375%, respectively.
These three ETFs also brought in significant new assets, with net inflows of $11.3 billion, $12.9 billion, and $4 billion, respectively. (In fact, both BIL and USFR were among the top 10 ETFs with the highest net inflows for 2022.)
Reducing duration and credit risk, leveraging floating-rate bonds and Treasuries -- it’s a classic playbook for coping with huge interest rate moves. And in 2022, advisors stuck to the playbook.
Despite higher rates and rising yields, however, fixed income didn’t start providing income until later in the year, leading to my next observation:
For Lower-Risk Income, Advisors Turned to Options-Based ETFs
Forget using fixed income for income. In 2022, advisor research into the many options-based strategies soared, including funds that used traded puts and calls on particular indexes or that used covered call strategies to generate income.
One popular example was the Core Alternative ETF (CCOR), an active ETF designed to juice income potential by overlaying a portfolio of dividend-payers with an options collar to decrease volatility exposure — precisely the sort of lower-risk equity income advisors were hunting for. CCOR, which added $321 million in net new assets in 2022, saw advisor engagement rise 392%.
Another ETF that experienced increased research volumes last year was the ETC 6 Meridian Hedged Equity Index Option ETF (SIXH), which saw engagement rise 195%. SIXH, another active ETF, holds quality U.S. large-caps while selling call options against SPY to reduce volatility and provide income in bearish markets. It brought in $55 million in new net assets.
One footnote: Both CCOR and the six Meridian ETFs were brought to market by asset managers looking to repackage similar, extant strategies from their firms that were available in other wrappers. For years, the funds have remained relatively niche, with little daily trading volume or media attention. However, given both ETFs’ engagement increases in 2022, I think they’re clearly starting to find wider appeal. Will ETFs “built by advisors, for advisors” become the next big trend of 2023 as advisors seek to learn and benefit from the expertise of their peers?
Advisors Dug Deeper on Headlines in Defense, Real Estate
One of financial advisors’ most important functions is to be the steady hand at the wheel for their clients. But steady doesn’t mean “asleep.” To best help their clients, advisors must know when and how to seize tactical opportunities. The 2022 data shows three clear examples of advisors doing just that.
First, Russia’s invasion of Ukraine was one of the year’s biggest and most persistent headlines, and platform-wide, we saw massive engagement spikes in all topics related to the defense and aerospace industry. The biggest beneficiary was the Invesco Aerospace & Defense ETF (PPA), which saw a 173% advisor engagement growth year-over-year. It also brought in new net assets of $950 million as advisors tactically added positions to capitalize on a broader surge in defense spending.
Second, as interest rates began to rise in 2022, so too did research around strategies that could hedge out duration risk, such as the Simplify Interest Rate Hedge ETF (PFIX). The ETF, which saw engagement rise 195%, uses an active blend of Treasuries, TIPS, and over-the-counter interest rate options to protect investors against sharp rate hikes — like the ones we saw in 2022. PFIX added $114 million in 2022.
Finally, we saw gloomy headlines in real estate throughout 2022, with tumbling home prices and lackluster commercial real estate valuations. No wonder, then, that we saw such a pick-up in research volume for the Direxion Daily Real Estate Bear 3x Shares (DRV), a fund that, as the name implies, offers triple inverse exposure to an index of U.S. real estate companies and non-mortgage REITS. This fund, which had $169 million in inflows last year, saw engagement rise 178%.
What’s particularly fascinating about DRV’s popularity is that leveraged and inverse ETFs, despite their trading complexity, are often believed to be a predominantly retail phenomenon. The fact that DRV saw such a massive increase in engagement among advisors speaks to their utilization among sophisticated investors looking to squeeze alpha from markets for their clients. (As loath as I am to cite long-term performance for a leveraged fund that resets daily, DRV was up over 40% in 2022, in a year when broad real estate indexes dropped 20% or more.)
Looking to the Future: Rising Stars of 2023
It’s probably safe to say that some, if not most, of these advisor engagement trends will persist into 2023, at least in the short term. But if I’ve learned anything over the past 15-odd years in this industry, it’s that you can’t go wrong in ETF Land with expecting the unexpected. Who knows what new trends will emerge?
Actually, it’s easy to know -- just follow the advisors. They’re a savvy bunch. Where they go, markets will follow — we at VettaFi will be along for the ride.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | VettaFi's Top 10 Rising Stars of 2022 Ticker Name AUM ($MM) YTD fund flows % Change in Year-over-Year Engagement iMGP DBi Managed Futures Strategy ETF (DBMF) $927 $967 913% KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) $263 $269 471% Core Alternative ETF (CCOR) $593 $321 392% iShares Treasury Floating Rate Bond ETF (TFLO) $4,339 $4,010 375% SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) $26,472 $12,890 349% WisdomTree Floating Rate Treasury Fund (USFR) $13,049 $11,300 338% Simplify Interest Rate Hedge ETF (PFIX) $384 $114 195% ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) $320 $55 195% Direxion Daily Real Estate Bear 3X Shares (DRV) $196 $169 178% Invesco Aerospace & Defense ETF (PPA) $1,674 $950 173% Source: VettaFi I see four big conclusions -- you might see others, and I’d love to hear about them! Advisors Can’t Get Enough of Managed Futures ETFs Out of the 3,000+ ETFs we track, one fund’s popularity among advisors skyrocketed higher than all the rest in 2022: the iMGP DBi Managed Futures Strategy ETF (DBMF). But DBMF wasn’t alone. | VettaFi's Top 10 Rising Stars of 2022 Ticker Name AUM ($MM) YTD fund flows % Change in Year-over-Year Engagement iMGP DBi Managed Futures Strategy ETF (DBMF) $927 $967 913% KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) $263 $269 471% Core Alternative ETF (CCOR) $593 $321 392% iShares Treasury Floating Rate Bond ETF (TFLO) $4,339 $4,010 375% SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) $26,472 $12,890 349% WisdomTree Floating Rate Treasury Fund (USFR) $13,049 $11,300 338% Simplify Interest Rate Hedge ETF (PFIX) $384 $114 195% ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) $320 $55 195% Direxion Daily Real Estate Bear 3X Shares (DRV) $196 $169 178% Invesco Aerospace & Defense ETF (PPA) $1,674 $950 173% Source: VettaFi I see four big conclusions -- you might see others, and I’d love to hear about them! Advisors Can’t Get Enough of Managed Futures ETFs Out of the 3,000+ ETFs we track, one fund’s popularity among advisors skyrocketed higher than all the rest in 2022: the iMGP DBi Managed Futures Strategy ETF (DBMF). But DBMF wasn’t alone. | VettaFi's Top 10 Rising Stars of 2022 Ticker Name AUM ($MM) YTD fund flows % Change in Year-over-Year Engagement iMGP DBi Managed Futures Strategy ETF (DBMF) $927 $967 913% KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) $263 $269 471% Core Alternative ETF (CCOR) $593 $321 392% iShares Treasury Floating Rate Bond ETF (TFLO) $4,339 $4,010 375% SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) $26,472 $12,890 349% WisdomTree Floating Rate Treasury Fund (USFR) $13,049 $11,300 338% Simplify Interest Rate Hedge ETF (PFIX) $384 $114 195% ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) $320 $55 195% Direxion Daily Real Estate Bear 3X Shares (DRV) $196 $169 178% Invesco Aerospace & Defense ETF (PPA) $1,674 $950 173% Source: VettaFi I see four big conclusions -- you might see others, and I’d love to hear about them! Advisors Can’t Get Enough of Managed Futures ETFs Out of the 3,000+ ETFs we track, one fund’s popularity among advisors skyrocketed higher than all the rest in 2022: the iMGP DBi Managed Futures Strategy ETF (DBMF). But DBMF wasn’t alone. | VettaFi's Top 10 Rising Stars of 2022 Ticker Name AUM ($MM) YTD fund flows % Change in Year-over-Year Engagement iMGP DBi Managed Futures Strategy ETF (DBMF) $927 $967 913% KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) $263 $269 471% Core Alternative ETF (CCOR) $593 $321 392% iShares Treasury Floating Rate Bond ETF (TFLO) $4,339 $4,010 375% SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) $26,472 $12,890 349% WisdomTree Floating Rate Treasury Fund (USFR) $13,049 $11,300 338% Simplify Interest Rate Hedge ETF (PFIX) $384 $114 195% ETC 6 Meridian Hedged Equity Index Option ETF (SIXH) $320 $55 195% Direxion Daily Real Estate Bear 3X Shares (DRV) $196 $169 178% Invesco Aerospace & Defense ETF (PPA) $1,674 $950 173% Source: VettaFi I see four big conclusions -- you might see others, and I’d love to hear about them! Advisors Can’t Get Enough of Managed Futures ETFs Out of the 3,000+ ETFs we track, one fund’s popularity among advisors skyrocketed higher than all the rest in 2022: the iMGP DBi Managed Futures Strategy ETF (DBMF). But DBMF wasn’t alone. | 9f0d4206-379f-4cba-8adf-c26e620feb9b |
708756.0 | 2023-01-10 00:00:00 UTC | Add Diversification While Protecting the Downside With Managed Futures | DBMF | https://www.nasdaq.com/articles/add-diversification-while-protecting-the-downside-with-managed-futures | nan | nan | 2023 still carries over 2022's elements of the unknown, from inflation to a potential recession due to increased monetary policy tightening from the U.S. Federal Reserve. That said, investors can protect the downside while also adding a touch of diversification to their portfolios by utilizing a managed futures strategy.
That particular strategy is easily encapsulated in the iMGP DBi Managed Futures Strategy ETF (DBMF). Per its fund description, it seeks to replicate the pre-fee performance of leading managed futures hedge funds and to outperform through fee/expense disintermediation.
Furthermore, the fund allows for the diversification of portfolios by allocating capital to a variety of asset classes that are uncorrelated to typical capital market assets like stocks and bonds. In addition, it is an actively managed fund that uses long and short positions within the futures market, allowing for dynamic market exposure where portfolio managers can easily flex with changing market conditions by adding to or subtracting from the fund's holdings when conditions warrant a change.
The fund's positions within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This strategy analyzes the trailing 60-day performance of Commodity Trading Advisor (CTA) hedge funds and then determines a portfolio of liquid contracts that would best mimic the hedge funds’ averaged performance.
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. This allows investors to capture the upside while also protecting the downside, and as 2022 taught investors, having that level of flexibility is crucial in a 2023 where, as mentioned, market unknowns still exist.
"Hurricane insurance that makes you money while you wait for the storm. That, to me, is managed futures—a powerful diversification tool that should not only be available to high-net-worth portfolios, but to all portfolios," wrote Andrew Beer in Barron's.
"The problem is that exposure to managed futures has been difficult to access for advisors whose clients may not be accredited or able to reach hedge fund minimums. That’s changing," Beer wrote further.
Record Performance in 2022 for Managed Futures
Managed futures strategies run by CTAs saw record performance during 2022 despite the macroeconomic challenges of inflation and the resulting market challenges in the stock market, as evidenced by the S&P 500's decline of 19%. Nonetheless, managed futures indexes under Societe Generale not only weathered the 2022 storm, but were also able to extract gains.
According to an AlphaWeek article, Societe Generale's three major managed futures indexes all ended 2022 in the green. The SG CTA Index was up 20%, the SG Trend Index was up 27%, and the SG Short-Term Traders index was up 11%.
"2022 has once again disproved the accusation that trend-following no longer works, and we continue to field requests from the entire spectrum of investor types and sizes for managed futures strategies of all different varieties," said Tom Wrobel, director of capital consulting at Societe Generale Prime Services and Clearing.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That particular strategy is easily encapsulated in the iMGP DBi Managed Futures Strategy ETF (DBMF). 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. 2023 still carries over 2022's elements of the unknown, from inflation to a potential recession due to increased monetary policy tightening from the U.S. Federal Reserve. | 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. That particular strategy is easily encapsulated in the iMGP DBi Managed Futures Strategy ETF (DBMF). In addition, it is an actively managed fund that uses long and short positions within the futures market, allowing for dynamic market exposure where portfolio managers can easily flex with changing market conditions by adding to or subtracting from the fund's holdings when conditions warrant a change. | That particular strategy is easily encapsulated in the iMGP DBi Managed Futures Strategy ETF (DBMF). 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. Per its fund description, it seeks to replicate the pre-fee performance of leading managed futures hedge funds and to outperform through fee/expense disintermediation. | That particular strategy is easily encapsulated in the iMGP DBi Managed Futures Strategy ETF (DBMF). 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. That said, investors can protect the downside while also adding a touch of diversification to their portfolios by utilizing a managed futures strategy. | 394beef4-aa61-4ab0-974f-e5f12dbfdfb5 |
708757.0 | 2023-01-06 00:00:00 UTC | VettaFi Voices On: 2023 Predictions | DBMF | https://www.nasdaq.com/articles/vettafi-voices-on%3A-2023-predictions | nan | nan | What do markets have in store for investors in 2023? The VettaFi Voices gathered around the Slack water cooler, consulted their crystal balls, and shared their predictions.
Todd Rosenbluth, head of research: Since I'm first, everyone will agree with me and we can go back to finalizing details for Exchange, the best conference of 2023, right?
I previously said it on "ETF Prime," and now Nate Geraci is similarly predicting it, but: We will have $1 trillion of new money in the ETF market. We came close in 2021, with over $900 billion in flows, and we saw $611 billion in 2022, despite double-digit losses for many equity and fixed income benchmarks globally. Many people who have long used mutual funds are realizing now they paid a lot to have negative returns on stock and bond funds, then got a capital gain bill. Likely, they told their advisors, "We need to find something better." They have been and will continue to shift to ETFs.
In addition, the liquidity [in the ETF market] has gotten stronger, making institutional investors more comfortable. In 2023, I think we will have another strong year for smart beta ETFs. In 2022, there were record inflows to alternatively weighted ETFs, including low-volatility ETFs like the Invesco S&P 500® Low Volatility ETF (SPLV) and the iShares MSCI USA Min Vol Factor ETF (USMV), quality ETFs like the Pacer US Cash Cows 100 ETF (COWZ) and the iShares MSCI USA Quality Factor ETF (QUAL), and equal-weighted ETFs like the Invesco S&P 500 Equal Weight ETF (RSP).
The market is likely to remain choppy as the Fed slows down rate hikes and companies struggle to generate earnings growth. ETFs that are tilted away from growth will perform well. I'm focused on multi-factor ETFs in particular, as many of them performed well in 2022 -- examples include the iShares US Equity Factor ETF (LRGF), the Invesco Russell 1000 Dynamic Multifactor ETF (OMFL), and the SPDR MSCI USA StrategicFactors ETF (QUS). These can be a good replacement for people who want something like active management but who want to pay less and keep it simple. (Of course, they can still turn to active ETFs, like the JPMorgan Equity Premium Income ETF (JEPI), for equity income).
I also think we're going to see a shift away from the ultra-short bond ETFs that were in favor in 2022, like the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and the iShares Short Treasury Bond ETF (SHV). Investors will move further out on the curve as the Fed looks to slow down and even stop raising rates in 2023. I see investors instead turning to more intermediate-term products, like the iShares 7-10 Year Treasury Bond ETF (IEF) and the iShares 3-7 Year Treasury Bond ETF (IEI), which are more rate-sensitive in a positive way for the new environment. Or buying active core bond ETFs, like the PIMCO Active Bond ETF (BOND) and the SPDR DoubleLine Total Return Tactical ETF (TOTL), which benefit from management's ability to shift based on expectations of Fed action but find undervalued securities.
Dave Nadig, financial futurist: While the future is unknowable and predictions are a mugs game, I think $1 trillion in assets is pretty much in the bag, unless we have really malaise-filled markets for the entirety of the year. My combo platter of selected inputs and analysis (since I'm not an economist) is that we're probably going to overshoot from a Fed policy perspective, and we should already have been done [with rate hikes]. Because (particularly) inflation and labor data is muddy and complex, there are plenty of signs for people to point to which support their own narratives, but my read is this: The labor market has softened and inflation has moderated more than the data suggests. (In both cases, the signs are there, but you have to get way under the hood.) That's the reason so many of the endless "outlooks" for the year are talking about a first-half recession.
Other thoughts: I do think this is another good year for active flows, but the conversation is going to be much less about stock picking and much more about rethinking portfolio construction. Bond funds are going to proliferate (both literally, in terms of more funds being launched; but I also mean investors will use them more), and I think we'll see a much better year for international securities of all sorts as the dollar cools off.
Rosenbluth: Nothing like the start of a new year for hopes that it will be a good year for international investing. But actually, the MSCI EAFE Index lost less than the S&P 500 Index in 2022 -- not that most people are happy or even aware of it. But the dollar being less of a drag will be helpful for international stocks in 2023.
Nadig: One more thing -- Todd, I do think there's a lot of portfolio re-evaluation going on. It's a constant topic with advisors I talk to: how to deal with home bias, how to deal with bonds, where to find diversification, etc.
Rosenbluth: Agreed, Dave, and I think that is what will help get to $1 trillion of net inflows. If investors are re-evaluating their investments, they might as well choose a cheaper, more tax-efficient approach in ETFs.
Stacey, do you think energy markets will remain tight in 2023?
Stacey Morris, head of energy research: I think energy stocks can continue working in 2023. Even with two years of strong gains, the space hasn't become expensive. Companies are generating a lot of excess cash that is being returned to investors through buybacks and dividends. The impact of a recession on energy demand remains a risk, but I think energy markets will remain tight, supporting commodity prices.
Specific to midstream, I think it is a great energy subsector for income investors and for energy investors looking to ride out a recession. The fee-based nature of the midstream business model allows for stable cash flows, and midstream should be more defensive if the energy macro backdrop deteriorates. That is not my base case, but everyone's crystal balls are different. Our 2023 midstream/MLP outlook goes into more detail on the macro picture and why we think there is still plenty to like about midstream.
Rosenbluth: Does your outlook assume a recession that will slow oil demand, though?
Morris: Since you asked, I’m taking you into the weeds with me a bit! My outlook does not assume a recession driving oil prices materially lower. If there’s a deep recession, oil demand could certainly fall. (Typically, diesel demand is where you see the weakness, since it is more sensitive to overall economic activity. To connect the dots, lower diesel demand can cause refiners to lower utilization rates, which ultimately results in lower oil demand.)
However, there are a lot of factors that could offset potential demand weakness from a recession; China ramping back up, OPEC+ could cut supply to shore up prices, and Russian exports falling could also tighten the market. Keep in mind, Russia is a notable exporter of diesel, and the EU ban on Russian-refined product imports takes effect on February 5.
Potentially lower exports of diesel from Russia offset potentially weaker diesel demand. There's so many variables around energy markets, which is one of the things I love about trying to analyze this space.
If there is ultimately less diesel supply on the market, then that could offset demand weakness from a slowing economy. In short, I think this recession could be different for energy, and I think commodity prices could hold up better than one would normally expect in an economic slowdown.
Rosenbluth: If getting in the weeds involves diesel demand helping offset Russia, then I am happy to go along and learn as well. What about the travel space, Roxanna?
Roxanna Islam, associate director of research: For travel, I think we could see an environment that looks a lot like 2019, despite current inflationary pressures. Even though consumers are feeling higher prices from gas, food, and rent, they're still willing to spend on things like vacations and luxury goods. But I don't think that necessarily means they're eagerly throwing money into these items. Consumers are likely looking for ways to save money, which is another reason that I see e-commerce continuing to show strength this year. It's easier for consumers to compare prices and shop for discounts online vs. in person, while retailers who haven't already invested in e-commerce and omni-channel operations may find it valuable to do so in order to more effectively manage inventory and reverse logistics operations (i.e., returns and exchanges).
Rosenbluth: E-commerce trends you highlight would be good for ETFs like the First Trust S-Network E-Commerce ETF (ISHP), the Amplify Online Retail ETF (IBUY), and the ProShares Online Retail ETF (ONLN), right?
Islam: Yes, but while the demand is there, e-commerce stocks are heavily related to the tech industry. And I think investors are still somewhat fearful of anything growth or tech-oriented, especially with what we've seen happen to stock prices in 2022. But since stock prices are down by over 50% for some large tech names (and some are currently at record lows), investors may also see 2023 as a buying opportunity for investments they felt like they were "too late" to get in on. This could be broadly supportive to thematic ETFs, since many of them are heavily weighted to "MAANG" stocks and other tech constituents. We're also still hearing a lot about layoffs, so I'm curious to see how many of these large tech/tech-oriented companies will actually be able to show some early improvement in their margins during 2023 and quell some of that investor reluctance to get back into tech or growth.
Rosenbluth: I see Lara Crigger is possibly trying to get the final word, but I'm still waiting to find out what she sees in her crystal ball.
Lara Crigger, editor-in-chief: Just captivated by the conversation, that's all!
So I think the safest prediction is that, just like 2021 and 2022, we’ll continue to see active ETFs flood the market, regardless of whether or not investors are actually buying them. I highlighted this on Twitter, but active ETFs made up 235 launches last year, or 55% of all new ETFs.
Yet -- and I have to tug on something Dave said upthread: Active ETFs aren’t quite punching at their weight class with investors. More than a quarter (27%) of the ETF market is made up of active funds now, but they only account for 5% of total AUM, and they only accounted for about 13% of total ETF inflows last year. Apologies for the numbers soup there, but the TL;DR is that issuers are launching more active ETFs than investors actually have appetite for.
Now, I'm pretty sure some of that's selection effect at work. Most advisors only allocate to ETFs listed on their platforms, and most advisory platforms only add new ETFs that have crossed some AUM threshold (e.g., $50 million or $100 million) and which have been around for a certain number of years (often three or more). Most new ETFs don’t make it onto those platforms, and most new ETFs for the past two years have been active strategies -- ergo, that means there’s a whole lot of active ETFs advisors can't access and therefore can't put money into.
That said, I think we see a lot of evidence that advisors are also waiting for the right active strategy to sprinkle into their portfolio -- look, for example, at the success of JEPI, which added $13 billion in 2022.
Rosenbluth: Lara, let me repeat your numbers back to you but with a different spin. Active ETFs represent 5% of the asset base but pulled in 13% of the flows. Meaning, they are in demand. They're not growing as fast as the supply is, but while JEPI and the Dimensional U.S. Core Equity 2 ETF (DFAC) are crushing it with limited ETF trading histories, it can take time for a new ETF to gain traction. Active ETFs will represent 10% of the ETF market in the next few years.
Crigger: I'd buy that. Like you, Todd, I'm keeping my eye on “active-ish” strategies in 2022, by which I mean funds like the Pacer Trendpilot US Large Cap ETF (PTLC) or the Fairlead Tactical Sector ETF (TACK), which might or might not be technically classified as active, but which use a rules-based methodology to make sophisticated, tactical toggles between asset classes or sectors. And in fact, those two ETFs saw big engagement jumps on the VettaFi platform in December.
I’d also put in that camp the iMGP DBi Managed Futures Strategy ETF (DBMF), which saw the highest year-over-year engagement increase of any ETF.
I think "active-ish" strategies will be the ones investors and advisors turn to in order to get them through the recession that the consensus is calling for. And they're going to be sophisticated strategies, maybe using options or technical signals in their methodologies. Those of us in editorial are all going to have to get doctorates in statistics to keep up.
Rosenbluth: What's your wildest prediction?
Crigger: Wild prediction: We’re going to see many more influencer-backed ETFs launch this year. Every Kim Kardashian and Jake Paul with a wide Insta-following and a dream is going to take a page out of Dave Portnoy’s book and launch their own ETF. We already saw a few come out this past year, including the Meet Kevin Pricing Power ETF (PP) and the Jim Cramer ETFs. More to come.
Rosenbluth: We will definitely see more ETFs tied to personalities, but will they have staying power? I doubt it. The Portnoy-related index fund, the VanEck Social Sentiment ETF (BUZZ), is down to $50 million in assets. And while I got the chance to meet Kevin, the mind behind PP, the fund has $11 million in AUM (albeit after just a month). The bar to launch an ETF is definitely lower than it used to be.
Hey, some of us have four letters only in our name. Maybe there can be a DAVE or a LARA ETF in 2023.
Lara Crigger: Don't sleep on a TODD ETF! That seems like a surefire winner.
Be sure to catch the VettaFi Voices, as well as a host of experts, at Exchange, on February 5–8, 2023, in sunny Miami, Florida. To learn more about the event and register, please visit the Exchange website.
For more news, information, and analysis, visit the Innovative ETFs Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I’d also put in that camp the iMGP DBi Managed Futures Strategy ETF (DBMF), which saw the highest year-over-year engagement increase of any ETF. Dave Nadig, financial futurist: While the future is unknowable and predictions are a mugs game, I think $1 trillion in assets is pretty much in the bag, unless we have really malaise-filled markets for the entirety of the year. However, there are a lot of factors that could offset potential demand weakness from a recession; China ramping back up, OPEC+ could cut supply to shore up prices, and Russian exports falling could also tighten the market. | I’d also put in that camp the iMGP DBi Managed Futures Strategy ETF (DBMF), which saw the highest year-over-year engagement increase of any ETF. In 2022, there were record inflows to alternatively weighted ETFs, including low-volatility ETFs like the Invesco S&P 500® Low Volatility ETF (SPLV) and the iShares MSCI USA Min Vol Factor ETF (USMV), quality ETFs like the Pacer US Cash Cows 100 ETF (COWZ) and the iShares MSCI USA Quality Factor ETF (QUAL), and equal-weighted ETFs like the Invesco S&P 500 Equal Weight ETF (RSP). Or buying active core bond ETFs, like the PIMCO Active Bond ETF (BOND) and the SPDR DoubleLine Total Return Tactical ETF (TOTL), which benefit from management's ability to shift based on expectations of Fed action but find undervalued securities. | I’d also put in that camp the iMGP DBi Managed Futures Strategy ETF (DBMF), which saw the highest year-over-year engagement increase of any ETF. In 2022, there were record inflows to alternatively weighted ETFs, including low-volatility ETFs like the Invesco S&P 500® Low Volatility ETF (SPLV) and the iShares MSCI USA Min Vol Factor ETF (USMV), quality ETFs like the Pacer US Cash Cows 100 ETF (COWZ) and the iShares MSCI USA Quality Factor ETF (QUAL), and equal-weighted ETFs like the Invesco S&P 500 Equal Weight ETF (RSP). Rosenbluth: E-commerce trends you highlight would be good for ETFs like the First Trust S-Network E-Commerce ETF (ISHP), the Amplify Online Retail ETF (IBUY), and the ProShares Online Retail ETF (ONLN), right? | I’d also put in that camp the iMGP DBi Managed Futures Strategy ETF (DBMF), which saw the highest year-over-year engagement increase of any ETF. Or buying active core bond ETFs, like the PIMCO Active Bond ETF (BOND) and the SPDR DoubleLine Total Return Tactical ETF (TOTL), which benefit from management's ability to shift based on expectations of Fed action but find undervalued securities. Rosenbluth: If getting in the weeds involves diesel demand helping offset Russia, then I am happy to go along and learn as well. | 5aace1e2-c766-4c4f-966b-3793207760c9 |
708758.0 | 2023-01-04 00:00:00 UTC | How to Allocate to Managed Futures in Your Portfolios | DBMF | https://www.nasdaq.com/articles/how-to-allocate-to-managed-futures-in-your-portfolios | nan | nan | Last year was a phenomenal year for most managed futures strategies, and this year as volatility and uncertainty continue regarding Fed rate hikes and potential recession, they’re likely to continue their strong performance. But exactly how much should you allocate to managed futures in your portfolio, and where should that allocation come from?
iM Global Partner, the issuer of one of 2022’s rock star ETFs, the iMGP DBi Managed Futures Strategy ETF (DBMF), broke down how various managed futures allocation levels would likely have performed in a traditional 60/40 portfolio historically to find the optimal level for advisors. In addition, the company also analyzed where the funding for the allocations should optimally come from within a portfolio to give the best overall return.
From a statistical standpoint, every additional 5% increment of managed futures added pro rata to a traditional portfolio (up to 25%) increases returns since inception while offering significant reduction of the portfolio’s standard deviation when looking back at a time period between January 1, 2000, and September 30, 2022, (accounting for annual rebalances).
Image source: iMGP Funds
The strategy gets even more impressive when you narrow in on the times of market turbulence and drawdown — specifically the post-tech-bubble bear market in 2000–2002, the global financial crisis bear markets between 2001–2009, and the current bear market.
“Even a small 5% allocation to managed futures would have saved you about 2.3 percentage points of performance this year – from a loss of 20.2% to 17.9%. A ‘bold’ 10% allocation would have come close to cutting losses by a quarter,” reported iMGP.
Image source: iMGP Funds
Portfolio optimizers focused on risk-adjusted returns will generally attempt to allocate up to a full third of a traditional portfolio to managed futures, far more than most advisors and clients are even remotely comfortable with. Given the middling performance of most managed futures strategies during the last decade when traditional equities and bonds outperformed virtually anything else, even a 5%–10% allocation can feel like a hard sell, but it’s a practical allocation sweet spot that can reap multi-faceted rewards for portfolios.
“Why would an optimizer tell you to invest so much in managed futures? Simply put, because the strategy (as measured by the SG CTA Index) has similar long-term returns to a 60/40 portfoli, but with essentially zero long-term correlation to both stocks and bonds: -0.09 correlation to the S&P 500 Index from January 2000 through September 2022, and 0.08 correlation to the Bloomberg Aggregate Bond Index (using monthly returns),” explained iMGP.
How to Fund a Managed Futures Allocation
One of the greatest appeals of managed futures is their lack of correlation to other asset classes, and so funding them pro rata from a current allocation that’s already preset at a client’s risk tolerance and return stream goals is a logical next step. An alternative option is to fund the allocation greater than pro rata from bonds, particularly given that equities outperform bonds over a long enough time period and the strong performance of managed futures strategies during periods of sustained equity weakness.
For larger allocations, it’s important to keep in mind opportunity costs in the long term: “the further one moves away from pro rata funding, the more it becomes an active ‘bet’ against existing asset allocation, and the greater the chance of an extreme outcome that could derail an otherwise successful investment plan,” iMGP explained.
Ultimately, having an allocation percentage to managed futures that you are both comfortable with and can defend confidently to your clients during periods of underperformance is the goal. It’s a strategy that offers long-term, multifaceted benefits to a portfolio, and the goal is almost always to maintain long-term exposures to any asset class when possible.
According to iMGP, “A managed futures allocation should be big enough to move the needle in your portfolio when it’s working, otherwise the inevitable challenging periods along the way will hardly be worth it. But, the allocation can’t be so big that you (or your client) will throw in the towel during rough patches. It can be a tricky needle to thread, but one that we believe is well worth it when considering the long-term benefits to a portfolio.”
The iMGP DBi Managed Futures Strategy ETF (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 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). The fund has a management fee of 0.85%.
For more news, information, and analysis, visit the Managed Futures Channel.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It can be a tricky needle to thread, but one that we believe is well worth it when considering the long-term benefits to a portfolio.” The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. iM Global Partner, the issuer of one of 2022’s rock star ETFs, the iMGP DBi Managed Futures Strategy ETF (DBMF), broke down how various managed futures allocation levels would likely have performed in a traditional 60/40 portfolio historically to find the optimal level for advisors. According to iMGP, “A managed futures allocation should be big enough to move the needle in your portfolio when it’s working, otherwise the inevitable challenging periods along the way will hardly be worth it. | iM Global Partner, the issuer of one of 2022’s rock star ETFs, the iMGP DBi Managed Futures Strategy ETF (DBMF), broke down how various managed futures allocation levels would likely have performed in a traditional 60/40 portfolio historically to find the optimal level for advisors. It can be a tricky needle to thread, but one that we believe is well worth it when considering the long-term benefits to a portfolio.” The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. An alternative option is to fund the allocation greater than pro rata from bonds, particularly given that equities outperform bonds over a long enough time period and the strong performance of managed futures strategies during periods of sustained equity weakness. | iM Global Partner, the issuer of one of 2022’s rock star ETFs, the iMGP DBi Managed Futures Strategy ETF (DBMF), broke down how various managed futures allocation levels would likely have performed in a traditional 60/40 portfolio historically to find the optimal level for advisors. It can be a tricky needle to thread, but one that we believe is well worth it when considering the long-term benefits to a portfolio.” The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. How to Fund a Managed Futures Allocation One of the greatest appeals of managed futures is their lack of correlation to other asset classes, and so funding them pro rata from a current allocation that’s already preset at a client’s risk tolerance and return stream goals is a logical next step. | It can be a tricky needle to thread, but one that we believe is well worth it when considering the long-term benefits to a portfolio.” The iMGP DBi Managed Futures Strategy ETF (DBMF) allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. iM Global Partner, the issuer of one of 2022’s rock star ETFs, the iMGP DBi Managed Futures Strategy ETF (DBMF), broke down how various managed futures allocation levels would likely have performed in a traditional 60/40 portfolio historically to find the optimal level for advisors. But exactly how much should you allocate to managed futures in your portfolio, and where should that allocation come from? | 4b5fe106-25f8-47ac-8c97-7e98001d376e |
708759.0 | 2023-01-03 00:00:00 UTC | ETF Prime: 2023 ETF Industry Preview With Dave Nadig | DBMF | https://www.nasdaq.com/articles/etf-prime%3A-2023-etf-industry-preview-with-dave-nadig | nan | nan | On the first 2023 episode of ETF Prime, host Nate Geraci and Dave Nadig, Financial Futurist at VettaFi, previewed the upcoming year in ETFs and the financial markets. Nadig also discussed the potential implications of longer-term asset management trends including crypto, ESG, direct indexing, and the rise of passive.
After taking a moment to catch up, Nadig and Geraci started off discussing the upcoming Exchange conference, which kicks off February 5th through February 8th at the Fontainebleau in Miami Beach. “Really excited for some of the things we’re going to be able to put on stage down there,” Nadig said, with Geraci noting that ETF Prime will record live at the event.
Looking Into the Market Crystal Ball
Coming off a year where the S&P was down 18%, bonds were down 13% and just about every asset class, save commodities, was down on the year. 2022 cracked just about every crystal ball out there (while also pouring gasoline onto tarot decks and lighting them ablaze for good measure).
That said, because predictions remain fun and useful thought experiments, Geraci and Nadig made a few for 2023, fully anticipating some of these as not coming true.
Fed Up
Nadig started off by looking at consensus, with numerous end of the year pieces coming in all agreeing that the first half of the year will be soft, the Fed will have to pivot, and the markets will recover at the end of the year.
Geraci expressed concern that the Fed could be crushing demand when there are some real supply side issues that haven’t been resolved.
“I think there are plenty of folks out there that I respect who believe the Fed has already made a policy error, has already been too aggressive for too long,” Nadig concurred. He thinks the consensus could be right, with a soft early year that sees inflation prints tracking in the proper direction but more data showing the labor impacts of rising rates. Despite generally agreeing with consensus, Nadig noted “I’m skeptical on rate reductions in calendar year 2023.”
Investor Plays
Despite the bumpy 2022, no investors ran to cash. Nadig articulated that this is because, when it comes down to it, there is no alternative – U.S. investors have been conditioned from such a long stretch of no rates to invest in stocks. “That has been beaten into heads of millennials and Gen-Xers for decades at this point. The irony is its less true than its been in 30-40 years.” Nadig thinks portfolio products, hedging and rate-based products, and more will start to see their time in the sun.
Making what he described as a “wussy” call, Geraci said, “I expect bonds to make a big come back this year.” Gold is also compelling, according to Geraci. Gold “typically marches to the beat of its own drum,” he said, pointing out that the fall of crypto could help make gold more attractive as the “tried and true” store of value.
Nadig is more skeptical on gold. A strong dollar makes it tough to put together a case for gold to get a huge lift, as Nadig observed, “I don’t think it peaked over $2,000 more than once or twice through the entire crisis period during the pandemic.”
Record Breaking Inflows, Trades, and Launches
2021 set the high-water mark for ETF inflows, but in some ways 2022’s performance was even more remarkable. Despite the challenges facing the markets, ETFs had $600 billion in inflows with enormous trading volume and numerous product launches. Asked if the $900 billion record from 2021 could be topped, Nadig said it is not only possible, but likely. “This is largely a reconfiguration year,” Nadig said, with advisors and investors looking at how they want to position amid a year that is likely to be less dramatic than the previous one. “That lack of drama is great for inflows because it means lots of folks are going to be looking at their statements.”
A trillion dollars is completely possible, barring any sort of hiccup. Nadig saw potential danger in the ETF space if the market becomes weird and idiosyncratic and keeps changing up rapidly enough to burn hands and exhaust investors.
“Just think about how dormant the fixed income side of the ETF balance sheets have been for so long,” Nadig observed, noting that lots of interesting bond funds have recently launched and look well positioned to hoover up more flows in 2023. “I do think fixed income is going to be the story of the year.” New, innovative products could help further boost fixed income’s ETF ascension.
Factor Based Resurgence and ARK Comeback?
Though not suggesting that the smart beta heyday have the 2010s is coming back, Nadig did suggest that factor-based ETFs might see a resurgence given some of the strong numbers they put up.
ARK’s flagship fund, the ARK Innovation ETF (ARKK) had a performance year to forget despite continuing to garner inflows as investors doubled down on the fund. Geraci asked Nadig what ARK’s future will look like, and Nadig offered that getting kicked in the teeth comes part and parcel with innovative technology. Their Tesla positioning aside, under the hood ARK is still looking for disruptive companies that have great ideas. They aren’t simply doubling down on what they already have, but looking for the next big thing. “The question is going to be timing. I actually suspect they’ll get the calls right,” Nadig said, the question will be timing their calls and getting into the right companies at the right time.
Morgan Stanley Moves in 2023
Morgan Stanley could make moves into the ETF space. According to Nadig, “In two to three years we may be talking about them being in the top 10 and rising.” With $5 trillion in wealth and distribution networks galore, both Geraci and Nadig see Morgan Stanley as a future big player in the ETF space.
The 60/40 Portfolio’s Death Has Been Exaggerated (Or has it?)
VettaFi’s Lara Crigger predicted on the last episode of ETF Prime that the 60-40 might be over, causing quite a stir. Nadig said he agrees with Crigger, but not in the way that many interpreted her comments. “It’s not that 60/40 is dead because that asset allocation is a bad idea. I think it’s the idea that you can come up with this abstraction that that’s monolithic and say that this is an accurate benchmark for the average portfolio is silly.” Nadig expressed that there are multiple ways to slice and dice an allocation. U.S. equity allocation vs non-home bias allocation? What are your two or three-rate positions? What are your non-correlated assets? He noted that funds like Cambria Trinity ETF (TRTY) don’t own a 60/40 portfolio. It owns a complex portfolio with a variety of assets in it. Funds like the iMGP DBI Managed Futures Strategy ETF (DBMF) also had killer years, paving the way for more complex uncorrelated products and alternatives to grow in 2023, even though it might be six months too late to ride the alt wave.
2023 Crypto Clues
Asked if a crypto comeback is possible in 2023, Nadig said he doesn’t believe that we’ll see the advisor space have a ton of hype for it. He thinks that there’s been a crypto recalibration. Though quick to assert that he feels bad for people who lost money or got hoodwinked in the FTX debacle, Nadig said he’s bullish on what this space could bring and sees potential opportunity in this recalibration of the space. “It makes it easier to innovate because it lowers the temptation for these kinds of grifts.”
Nadig doesn’t see a Bitcoin spot ETF in 2023, but does think that there will be some interesting events with the GBTC SEC lawsuit and Valkyrie’s long shot shareholder takeover bid of GBTC.
Looking past 2023, Nadig thinks they will be playing in a sandbox for a couple of years before building up the necessary regulations and protections. He doesn’t see it as happening in this congress or even this presidency, but possible in the one after it. Afterward, there are a number of reasons to get excited about what cryptocurrencies can lead to and do on their own. “I think we can head towards a world of tokenized asset management where we get to choose the appropriate ways the system works and not just stumble into it, but we need that bridge.”
ESG
Pivoting to the future of ESG investing, Nadig said, “I’ll keep point out that the ESG versions of the S&P 500 have beaten the S&P 500 for every holding period you want to bother and go look at for every holding period starting today and going backwards.”
Though U.S. investors became hesitant on ESG and flows were largely flat, global investors remain highly interested and are pouring money into ESG funds. “It is simply the way the world is heading and the U.S. gets to decide how much we care.”
Direct Indexing
As direct indexing proliferates, Nadig reinforced that it won’t be an ETF killer, but could be a useful tool for investors. “You aren’t simplifying your life, you’re making your life much more accurate. That requires time and energy,” Nadig said, pushing back against the idea that direct indexing will simplify everything.
The Rise of Passive Investing
Investors continue to put money to work in passive products. “We live in a world where information about companies is now disseminated quickly and violently absorbed into prices that is frankly shocking sometimes,” Nadig said, continuing, “but at the same time, absent that, the drumbeat of the markets is going to be up and to the right.”
Geraci argued that the swingy nature of the passive market just means active managers can set prices faster.
Nadig thinks it's healthy to question the impacts of what you are doing, however, saying “what are we missing and would it provide some systemic instability? That is a question we should ask about passive every day. It’s a question we should ask about crypto every day.”
Listen to the entire episode of ETF Prime with Dave Nadig:
For more ETF Prime podcast episodes, visit our ETF Prime channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Funds like the iMGP DBI Managed Futures Strategy ETF (DBMF) also had killer years, paving the way for more complex uncorrelated products and alternatives to grow in 2023, even though it might be six months too late to ride the alt wave. He thinks the consensus could be right, with a soft early year that sees inflation prints tracking in the proper direction but more data showing the labor impacts of rising rates. “Just think about how dormant the fixed income side of the ETF balance sheets have been for so long,” Nadig observed, noting that lots of interesting bond funds have recently launched and look well positioned to hoover up more flows in 2023. | Funds like the iMGP DBI Managed Futures Strategy ETF (DBMF) also had killer years, paving the way for more complex uncorrelated products and alternatives to grow in 2023, even though it might be six months too late to ride the alt wave. On the first 2023 episode of ETF Prime, host Nate Geraci and Dave Nadig, Financial Futurist at VettaFi, previewed the upcoming year in ETFs and the financial markets. The Rise of Passive Investing Investors continue to put money to work in passive products. | Funds like the iMGP DBI Managed Futures Strategy ETF (DBMF) also had killer years, paving the way for more complex uncorrelated products and alternatives to grow in 2023, even though it might be six months too late to ride the alt wave. On the first 2023 episode of ETF Prime, host Nate Geraci and Dave Nadig, Financial Futurist at VettaFi, previewed the upcoming year in ETFs and the financial markets. According to Nadig, “In two to three years we may be talking about them being in the top 10 and rising.” With $5 trillion in wealth and distribution networks galore, both Geraci and Nadig see Morgan Stanley as a future big player in the ETF space. | Funds like the iMGP DBI Managed Futures Strategy ETF (DBMF) also had killer years, paving the way for more complex uncorrelated products and alternatives to grow in 2023, even though it might be six months too late to ride the alt wave. Nadig also discussed the potential implications of longer-term asset management trends including crypto, ESG, direct indexing, and the rise of passive. “Really excited for some of the things we’re going to be able to put on stage down there,” Nadig said, with Geraci noting that ETF Prime will record live at the event. | 0dee06ec-d64a-4284-87c1-1b264b7dd509 |
708760.0 | 2022-12-30 00:00:00 UTC | Will Hedge Fund ETFs Continue Their Winning Run in 2023? | DBMF | https://www.nasdaq.com/articles/will-hedge-fund-etfs-continue-their-winning-run-in-2023 | nan | nan | Hedge funds have struggled a lot in recent years, as performance has been muted and excessive fees collected by firms have dulled their demand. Last year, hedge funds delivered broad-based annual returns of 10.3%, per the benchmark HFRI Fund Weighted Composite Index from Hedge Fund Research, as quoted on Yahoo Finance. The S&P 500 returned nearly 27% over the same period.
But 2022 has been different for defensive ETFs like hedge funds as the year has been disastrous for Wall Street. Super-hot inflation, rising rates, supply-chain issues, the Russia-Ukraine war, the oil price rally and, last but not least, coronavirus fear – all contributed to the market slump this year. As a result, investors flocked to defensive ETFs like hedge funds.
Citadel is on pace for its most profitable run ever. Its flagship Wellington fund reportedly gained 32% this year through November, while the S&P 500 was down more than 14% over the same period. The firm is expected to return about $7 billion in profits to its investors this year, the Yahoo Finance article reported. The D. E. Shaw Group and Millennium Management are also likely to deliver double-digit annual returns, gaining 23% and 10%, respectively, as of the end of November.
HFR's weighted composite index, a global, equal-weighted index of the largest hedge funds that report to the firm's database, saw hedge funds down just 2.62% this year as of November against a 14.39% drop for the S&P 500 over that same period.
Against this backdrop, below, we highlight a few winning hedge funds of the year.
ETFs in Focus
Simplify Interest Rate Hedge ETF PFIX – Up 85.5% YTD
The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed-income volatility increases, while providing the potential for income. The fund charges 50 bps in fees.
Advocate Rising Rate Hedge ETF RRH – Up 34.1% YTD
The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long-term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
iMGP DBi Managed Futures Strategy ETF DBMF – Up 20.7%
The fund seeks long-term capital appreciation. The fund will employ long and short positions in derivatives, primarily futures contracts and forward contracts, across broad asset classes of equities, fixed income, currencies and commodities. The fund charges 85 bps in fees and yields 8.60% annually.
SPDR SSgA Multi-Asset Real Return ETF RLY – Up 8.3%
The SPDR SSgA Multi-Asset Real Return ETF seeks to achieve real return consisting of capital appreciation and current income. The fund looks to provide exposure to inflation-protected securities issued domestically and internationally, domestic and international real estate securities, commodities, and publicly traded companies in natural resources or commodity businesses. These companies may include agriculture, energy, and metals and mining companies. The fund charges 50 bps in fees and yields 16.23% annually.
First Trust Managed Futures Strategy Fund FMF – Up 5.6%
The First Trust Managed Futures Strategy ETF is an actively managed exchange-traded fund that seeks to achieve positive total returns that are not directly correlated to broad market equity or fixed-income returns. The fund charges 96 bps in fees.
Zacks Names "Single Best Pick to Double"
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SPDR SSgA MultiAsset Real Return ETF (RLY): ETF Research Reports
First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports
iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports
Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | iMGP DBi Managed Futures Strategy ETF DBMF – Up 20.7% The fund seeks long-term capital appreciation. Click to get this free report SPDR SSgA MultiAsset Real Return ETF (RLY): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports To read this article on Zacks.com click here. Hedge funds have struggled a lot in recent years, as performance has been muted and excessive fees collected by firms have dulled their demand. | Click to get this free report SPDR SSgA MultiAsset Real Return ETF (RLY): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF DBMF – Up 20.7% The fund seeks long-term capital appreciation. ETFs in Focus Simplify Interest Rate Hedge ETF PFIX – Up 85.5% YTD The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed-income volatility increases, while providing the potential for income. | Click to get this free report SPDR SSgA MultiAsset Real Return ETF (RLY): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF DBMF – Up 20.7% The fund seeks long-term capital appreciation. ETFs in Focus Simplify Interest Rate Hedge ETF PFIX – Up 85.5% YTD The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed-income volatility increases, while providing the potential for income. | Click to get this free report SPDR SSgA MultiAsset Real Return ETF (RLY): ETF Research Reports First Trust Managed Futures Strategy ETF (FMF): ETF Research Reports iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports To read this article on Zacks.com click here. iMGP DBi Managed Futures Strategy ETF DBMF – Up 20.7% The fund seeks long-term capital appreciation. The firm is expected to return about $7 billion in profits to its investors this year, the Yahoo Finance article reported. | 76dc450e-92fb-4069-85b3-015e2a126bae |
708761.0 | 2022-12-27 00:00:00 UTC | Top-Read Managed Futures Stories of 2022 | DBMF | https://www.nasdaq.com/articles/top-read-managed-futures-stories-of-2022 | nan | nan | Alternatives hit their stride in the chaos of 2022’s markets, often capitalizing on volatility and a changing market regime. Managed futures were some of the best-performing alternatives of 2022 and these were the most-read articles by advisors in a year of equity and bond underperformance and prolonged volatility.
Hedge Against Market Volatility With This Managed Futures Fund
This was the most popular article regarding strategies that invest in futures in 2022. Written at the beginning of May in the middle of the S&P 500’s weeklong drop that resulted in an 8% loss and the sharpest decline since 2020 and one day after the first 0.50% interest rate increase that would catapult to 0.75% in subsequent FOMC meetings, advisors were in full research mode for volatility mitigation strategies.
That volatility has persisted throughout the year and is something that managed futures and funds that invest in the futures market — where knowledgeable investors have the ability to short underperforming asset classes — have capitalized on.
This Managed Futures ETF Becomes First to Be Rated Five Stars
This article tells the story of the incredible performance and success of the iMGP Dbi Managed Futures Strategy ETF (DBMF) in 2022. The fund that began the year with an AUM of around $60 million brought in $1 billion in new inflows in 2022 and when it gained its five-star rating from Morningstar, it was one of only two alternatives ETFs to have done so.
DBMF is a fund that’s designed to capture the performance of markets regardless of which direction they’re moving in and seeks to replicate the average performance of the 20 largest Commodity Trading Advisor (CTA) hedge funds. It’s the ultimate trend-following strategy that uses quantitative analysis and modeling to determine how asset classes are actually trading and often captures trends of changing market regimes before investors respond.
Why Managed Futures Are the Crisis Alpha Generators
This was the third most popular managed futures story in 2022 on the VettaFi platform and it isn’t a stretch to understand why. Managed futures as a recognized, distinct strategy got their start around the time of the Financial Crisis of 2008 when their ability to offer standout performance during the market dislocation earned them their reputation as crisis alpha generators.
In the long lull of relative quiet for markets since 2008, these strategies offered dependable but middling performance compared to the strong performance of equities over the same period that flourished in a low-rate environment with little volatility. Most advisors and investors, therefore, had little familiarity with the strategy coming into 2022 but the outperformance of managed futures funds this year when equities and bonds have suffered as well as their extremely low correlation to both asset classes have pulled the strategy into the spotlight for much of the year.
This particular piece was written in May, at the beginning of the Fed’s ramped-up, aggressive rate hiking cycle and shortly after Russia invaded Ukraine when global and domestic markets were in turmoil with little clarity. Advisors were looking to understand not just what managed futures were (futures investing remains a murky morass of complexity for most investors), as well as the why’s of their performance potential and hedging opportunity for portfolios.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | This Managed Futures ETF Becomes First to Be Rated Five Stars This article tells the story of the incredible performance and success of the iMGP Dbi Managed Futures Strategy ETF (DBMF) in 2022. DBMF is a fund that’s designed to capture the performance of markets regardless of which direction they’re moving in and seeks to replicate the average performance of the 20 largest Commodity Trading Advisor (CTA) hedge funds. Written at the beginning of May in the middle of the S&P 500’s weeklong drop that resulted in an 8% loss and the sharpest decline since 2020 and one day after the first 0.50% interest rate increase that would catapult to 0.75% in subsequent FOMC meetings, advisors were in full research mode for volatility mitigation strategies. | This Managed Futures ETF Becomes First to Be Rated Five Stars This article tells the story of the incredible performance and success of the iMGP Dbi Managed Futures Strategy ETF (DBMF) in 2022. DBMF is a fund that’s designed to capture the performance of markets regardless of which direction they’re moving in and seeks to replicate the average performance of the 20 largest Commodity Trading Advisor (CTA) hedge funds. That volatility has persisted throughout the year and is something that managed futures and funds that invest in the futures market — where knowledgeable investors have the ability to short underperforming asset classes — have capitalized on. | This Managed Futures ETF Becomes First to Be Rated Five Stars This article tells the story of the incredible performance and success of the iMGP Dbi Managed Futures Strategy ETF (DBMF) in 2022. DBMF is a fund that’s designed to capture the performance of markets regardless of which direction they’re moving in and seeks to replicate the average performance of the 20 largest Commodity Trading Advisor (CTA) hedge funds. Hedge Against Market Volatility With This Managed Futures Fund This was the most popular article regarding strategies that invest in futures in 2022. | This Managed Futures ETF Becomes First to Be Rated Five Stars This article tells the story of the incredible performance and success of the iMGP Dbi Managed Futures Strategy ETF (DBMF) in 2022. DBMF is a fund that’s designed to capture the performance of markets regardless of which direction they’re moving in and seeks to replicate the average performance of the 20 largest Commodity Trading Advisor (CTA) hedge funds. Hedge Against Market Volatility With This Managed Futures Fund This was the most popular article regarding strategies that invest in futures in 2022. | 35e50020-2866-44f9-bd32-8d67684049d4 |
708762.0 | 2022-12-21 00:00:00 UTC | ETF Prime: Lara Crigger Reveals Top 2022 Stories and 2023 Predictions | DBMF | https://www.nasdaq.com/articles/etf-prime%3A-lara-crigger-reveals-top-2022-stories-and-2023-predictions | nan | nan | In a special ETF Prime, VettaFi’s Lara Crigger and Morningstar’s Ben Johnson sat down with host Nate Geraci to recap the top 2022 stories that were in ETFs and look ahead to 2023.
Setting the table, Geraci noted at the top of the show that, “it was another monster year for ETFs. Second best year of inflows, record trading volume, a bunch of new entrants – including some big names like Capital Group, Doubleline, and Matthews Asia. We saw continued innovation with products that literally haven’t been done before – single stock ETFs, single bond ETFs, NightShares. There’s a reason why ETFs are called the Silicon Valley of asset management.”
The Year of Equity Income
After expressing gratitude to the listeners and reflecting on twelve years of doing the ETF Prime podcast, Geraci brought in Crigger, asking her what the headline for 2022 in the ETF world would be. Crigger pulled out an under the radar theme and said, “I think that 2022 was the year of equity income.” It is not surprising to Crigger that Dividend ETFs such as JPMorgan Equity Premium Income ETF (JEPI) were consistently among the most researched funds on the site. JEPI took in $12 billion in flows in 2022, with other dividend ETFs like the Schwab US Dividend Fund (SCHD) also racking up impressive numbers. “Poll after poll after poll was saying dividends and equity income was super important to advisors, and that they were seeing it as a way to deal with the rate environment and inflation environment,” Crigger noted.
Asked if she’s surprised by the $600 billion in flows ETFs have taken in during a year where both stocks and bonds get bruised, Crigger said she wasn’t all too surprised. “Investors really do love to buy on the dip.” Down markets provide attractive valuations, according to Crigger, which creates excellent buying opportunities for investors. There is also a phenomenon of seesawing in the markets, one area might stumble as growth and tech did this year, while another rises. Crigger pointed to the boost commodities received as inflation news began breaking, which had investors hedging with commodities. “There’s always some instrument or some investment that can help you deal with the current market environment,” Crigger observed, pointing to the depth and breadth of ETFs currently available.
Geraci concurred, adding that he sees this year as the year ETFs officially took the baton from mutual funds, which have had massive outflows. “I think people will look back on 2022 as the pivot point of the new ETF era,” he said.
ESGood Grief
Another big story from this year has been ESG, which Crigger feels she has become more cynical on after being a booster, “this was my tipping point where I realized there’s too much greenwashing going on.” ESG ETFs stalled on inflows, which Crigger conceded might just have to do with it being a down market. Speaking to the acronym itself, Crigger wondered if it had “gone the way of smart beta,” and become a term that doesn’t really mean anything given how watered down the ESG space has become. Other terms have started to vie to replace ESG, “Paris aligned,” and “climate transition,” among them, but it remains to be seen if any of these will catch on and become a new umbrella term.
Crigger thinks that opaque, obscure weighting tools are harder to grok than more concrete examples. Telling someone a fund has an ESG screener is more abstract than presenting the case for a lithium fund as EVs become the new automobiles of choice.
As noted by Geraci, energy had a big year and ESG tends to be overweight tech and growth and underweight energy, creating a performance issue for many ESG funds. “In the financial markets, performance is king,” Geraci said, before adding that ESG became highly politicized this year.
“In defense of ESG, we’re seeing a lot of interest on our platform in terms of engagement, in renewable energy in funds that are, again, easy to understand,” Crigger noted. She pushed back on the idea of politicization has dragged on the appeal of ESG, noting that renewable energy is one of the few places where both sides of the aisle have come to agree on. “No matter what my political beliefs may be, I should be interested in the energy transition. I should be positioning my portfolio for that.”
Commodities Are Hip Again
Another big story from 2022 has been the rise of commodities. “All it took was a war,” Crigger quipped, adding, “I’m hearing people now saying that commodities should be a strategic portion of your portfolio for good – not just for now or for the next couple of years, but for good.”
Inflows spiked in commodities ETFs before settling down by the end of the year, but Crigger thinks investors have taken note of the space, and of alternatives in general. Crigger pointed to managed futures as having a monster year, with funds like iMGP DBi Managed Futures Strategy ETF (DBMF) racking up impressive performance numbers.
Gold has had an unusual year, with gold ETFs seeing huge outflows even as the yellow metal manages to sidestep the carnage in the rest of the markets by being down just 3% on the year. “It is no surprise to me at all that as inflation moderates a little bit, we’re seeing outflows from the gold space,” Crigger said, noting that inflows for the rest of the commodity space are still robust. The Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) is still garnering a lot of attention, according to Crigger.
The commodities space is ripe for innovation, with 2022 being the first year investors could get K-1 free exposure to grains specifically with ETFs such as the Teucrium Agricultural Strategy No K-1 ETF (TILL). Crigger believes more innovation is in store for 2023.
Notable Launches
Asked about notable launches on the year, Crigger mentioned the recent VettaFi Voices column that dug into the topic as well as the NightShares funds and the single security ETFs. Though the bull and bear version of stocks seem like the obvious expression of the single security ETF, bonds seemed to have captured the imagination, with both the US Treasury 3 Month Bill ETF (TBIL) and the US Treasury 2 Year Note ETF (UTWO) raking in hefty flows. “These ETFs really do solve a problem,” Crigger observed.
2023 Predictions
Crigger’s first bold prediction was, “this is the year where we officially set aside the idea of 60/40.” She thinks investors will continue to look to equities. “People have gotten used to finding income from the equities markets, they are not going to shift even if yields are rising” Crigger noted, pointing to the success of dividends.
She sees fixed income as taking a smaller portion of the pie while alts become a staple of the modern portfolio. Geraci pushed back, noting that income is coming back to fixed income, but Crigger countered, “Why would you go for 4% or 5% when you could get 14% from JEPI?”
Her other big prediction centered on crypto. “2023 is the year we see crypto get its groove back,” Crigger said, pointing to how new tech frequently morphs and changes form. Blockchain, in particular, has a number of uses that haven’t been tapped into yet. She doesn’t see a spot bitcoin ETF as coming anytime soon, despite the Grayscale lawsuit. Asked if that lawsuit could change anything, Crigger said, “if anyone has a shot, it's Grayscale,” but she thinks it's tough to argue that there’s no manipulation and fraud in exchanges given the FTX story looming over the headlines. She thinks crypto broadly will have to overcome the reputational risk brought about by the fallout from FTX.
For a final prediction, Crigger joked that there will be a life altering event early in 2023, pointing to 2020’s COVID lockdowns, 2021’s insurrection attempt, and 2022’s outbreak of war. “I’m shutting my door, I’m bolting it shut, and hiding in my house,” she said.
Johnson’s 2022 Story of the Year and 2023 Predictions
Hearing Crigger’s top stories, Johnson added, “If you look across the 128 Morningstar categories, only 9 have seen positive returns year to date,” pointing to the huge outflows in mutual funds and the big swing toward ETFs. Johnson sees tax efficiencies as not the only reason for the swing, observing that, “ETFs are cheaper, more convenient, and just generally more compatible with modern advice models.”
He also considers the ESG demand drop as a big story, in part due to politics. Johnson does think that many asset managers are quietly integrating ESG into their workflows, so he sees ESG as being alive and well, despite the challenges. He sees regulators as having opportunity to clarify here, but said, “I think appetite is going to remain muted.”
Geraci brought up active management, which Johnson thinks will continue to make inroads. He noted most of the launches in 2022 were active. “Active is very much here and very much here to stay.”
For 2023, John predicted the 60/40 will bounce back. “I don’t think the 60/40 is going away,” he said, noting it has had obits written about it before. He thinks that direct indexing won’t necessarily benefit average investors the same way it does more high net worth investors, but he’s bullish on software and how it could change the investment landscape. “Software manifests itself everywhere.”
Listen to the entire episode of ETF Prime with Lara Crigger:
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For more ETF Prime podcast episodes, visit our ETF Prime channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Crigger pointed to managed futures as having a monster year, with funds like iMGP DBi Managed Futures Strategy ETF (DBMF) racking up impressive performance numbers. Second best year of inflows, record trading volume, a bunch of new entrants – including some big names like Capital Group, Doubleline, and Matthews Asia. Asked if that lawsuit could change anything, Crigger said, “if anyone has a shot, it's Grayscale,” but she thinks it's tough to argue that there’s no manipulation and fraud in exchanges given the FTX story looming over the headlines. | Crigger pointed to managed futures as having a monster year, with funds like iMGP DBi Managed Futures Strategy ETF (DBMF) racking up impressive performance numbers. There’s a reason why ETFs are called the Silicon Valley of asset management.” The Year of Equity Income After expressing gratitude to the listeners and reflecting on twelve years of doing the ETF Prime podcast, Geraci brought in Crigger, asking her what the headline for 2022 in the ETF world would be. Geraci pushed back, noting that income is coming back to fixed income, but Crigger countered, “Why would you go for 4% or 5% when you could get 14% from JEPI?” Her other big prediction centered on crypto. | Crigger pointed to managed futures as having a monster year, with funds like iMGP DBi Managed Futures Strategy ETF (DBMF) racking up impressive performance numbers. There’s a reason why ETFs are called the Silicon Valley of asset management.” The Year of Equity Income After expressing gratitude to the listeners and reflecting on twelve years of doing the ETF Prime podcast, Geraci brought in Crigger, asking her what the headline for 2022 in the ETF world would be. Crigger pulled out an under the radar theme and said, “I think that 2022 was the year of equity income.” It is not surprising to Crigger that Dividend ETFs such as JPMorgan Equity Premium Income ETF (JEPI) were consistently among the most researched funds on the site. | Crigger pointed to managed futures as having a monster year, with funds like iMGP DBi Managed Futures Strategy ETF (DBMF) racking up impressive performance numbers. As noted by Geraci, energy had a big year and ESG tends to be overweight tech and growth and underweight energy, creating a performance issue for many ESG funds. 2023 Predictions Crigger’s first bold prediction was, “this is the year where we officially set aside the idea of 60/40.” She thinks investors will continue to look to equities. | fe94a357-d050-4ceb-a760-4c2856797f7c |
708763.0 | 2022-12-21 00:00:00 UTC | Investment Insights Abound at Summit | DBMF | https://www.nasdaq.com/articles/investment-insights-abound-at-summit | nan | nan | Previewing the kind of insight and analysis that will be on display at Exchange, VettaFi vice chairman Tom Lydon, head of research Todd Rosenbluth, and financial futurist Dave Nadig appeared at the Investment Insights Summit last week.
Speaking to what VettaFi does, Rosenbluth said, “I view a lot of what we do from a research perspective is to connect the dots from what advisors are looking for to the tools and services that the asset managers are offering to them.” With over 3,000 ETFs available in the U.S., advisors need a way to sort through noise to find the products they can use to best serve their clients.
“There are some things that an ETF is just perfect for,” Nadig noted, taking care to point out that there are many other tools in the advisor toolkit as well.
What to Look for in an ETF
The first polling question of the summit centered on was what the most important metric to consider is when choosing an ETF. Lydon put his vote in for expense ratio, given how much more affordable many funds have become. “It’s tough for me not to pick exposure. Certainly, it is that case that expense ratio matters,” Nadig responded, arguing that though expense ratio might be critical when flipping from an expensive benchmark-hugging active fund to a much less expensive one, there are still a number of inexpensive options, and knowing what’s in each fund can be a difference-maker.
Rosenbluth pointed to the iShares Core S&P 500 ETF (IVV), the SPDR Portfolio S&P 500 (SPLG), and the Vanguard S&P 500 ETF (VOO) for cheap direct exposure to the S&P. Rosenbluth added, “We also tend to see that for many advisors, especially if they came from the mutual fund world, performance track record matters.”
Nadig warned that due diligence is critical, as it can be easy to read what’s on the tin but miss what a fund is actually doing. Rosenbluth concurred, noting that “the devil is often in the details with ETFs.”
Flows in the ETF Space
ETFs have been gaining market share, with huge inflows even as mutual funds see outflows amid an unusual market environment in 2022. Lydon brought up ARK, which has had a rough time from a performance perspective but continues to see flows. He recounted a conversation with Cathie Wood, asking her what she would say to advisors who bought ARKK in February. He said she remains convicted and would advise that if an investor invested for the right reasons, they should double down. “If you did a 4% allocation and it's now 2% of the portfolio, leveling up, more than ever, might be the right thing to do.”
ETFs flows are likely to end the year around $600 billion in flows, their second-biggest year ever. Nadig underlined that this big year happened across multiple asset classes. “It wasn’t just that everyone was chasing one thing.” He sees this as a good, healthy sign for the ETF industry, and also not unexpected in a down market year, where investors tend to pull away from high-cost, actively managed mutual funds and put their money in less expensive funds. “Mutual funds have lost $800 billion in outflows this year,” he observed.
Dividend ETFs have been a big winner as the market shifts to a defensive posture. “In third quarter, 96% of U.S. dividend-payers either kept or increased their dividends,” Nadig said. The JPMorgan Equity Premium Income ETF (JEPI) is an active fund that’s garnered a lot of attention in 2022. According to Nadig, it looks across the board at income opportunities, utilizing things like options. Nadig continued, “That’s really compelling for folks reacting to, for the first time in a long time, an inflationary period.”
Active Has a Big Year
Lydon said that “the ETF industry was built on the backs of traditional indexes,” before asking whether active management’s big year, performance-wise, has changed things.
According to Rosenbluth, “The short answer is ‘yes.’” Capital Group, T. Rowe Price, Fidelity, and JPMorgan all have active products. With more dispersion in the stock market, active funds have had opportunities to seize on greater success. Rosenbluth also noted that firms like Avantis have relatively low-cost active options.
Lots of active mutual fund issuers have made the leap into the ETF wrapper. Though some issuers are concerned about being front-run, Nadig believes that whether a fund is fully or semi-transparent, the products do work as intended. “Everything is doing what it says on the tin,” he said. Nadig thinks that front concerns are frequently overblown, but from the buyer's side, it doesn’t really matter.
Looking Into the Crystal Ball at 2023
“The Fed is likely to pivot, they are likely to first slow interest rate hikes and then, at some point, cut interest rates,” Rosenbluth said. Positioning for that is important. He also does think a recession is on the horizon. Growth and thematic strategies could also see a rebound, according to Rosenbluth, especially if the Fed does slow or pivot on hikes.
Nadig added, “Everyone is now a global macro investor whether they wanted to be or not.” He also sees structural inflation and more nominal growth as a possible outcome in the future.
Global diversification is going to be important, but as noted, European indexes have “been beaten up by the strong dollar.”
Bonds are also likely to see resurgence as their yields continue to look attractive. Nadig quipped that this might be the first year you could say you want to use a bond ladder and not get laughed out of the room. TIPS are starting to look good too, despite tons of outflows in TIPS ETFs this year. “TIPS all of a sudden make sense,” Nadig said, observing that inflation is likely not to pull down to 2% for a long while.
The Big Three Issuers
“The ETF industry has kind of been like the auto industry when you talk about the big three,” Lydon said before asking, “But is it changing? Do we have the Teslas of the ETF marketplace that are going to chip away at the big three?”
Nadig noted that Vanguard is gobbling up enough flows to likely usurp Blackrock at some point. He also sees a lot of potential dynamism below the top three, with Schwab “out-Vanguarding Vanguard” with the strategy of being a low-cost producer in core beta segments. “It may be boring, but boring can be good in a portfolio,” Nadig said. Below the top five, he sees a ton of innovation and a lot to like.
Dimensional has gone from highly exclusive mutual funds to being one of the top 10 issuers, largely through conversions. “They weren’t the first ones to convert from mutual funds to ETFs, but they did it in bulk,” Rosenbluth said, pinning them as a firm to watch, particularly from the active management angle.
Knocking on $20 billion dollars, Pacer is also turning heads. Their biggest ETF, the Pacer US Cash Cows 100 ETF (COWZ) has over $10 billion in holdings. Rosenbluth noted that high-quality companies are doing well, which makes COWZ appealing, and he sees these kind of strategies as likely to continue to see success in 2023, given the market environment.
China in 2023
Pivoting to China, Lydon asked Nadig and Rosenbluth what to expect. Nadig said, “Anybody who tells you they have it figured it out is absolutely making it up.” He sees it as reasonable to be cautious on China, given their policy concerns. Despite that, Nadig pointed out, “China and India are huge powerhouse drivers of the global economy, so to have no exposure there is a big bet.”
Managed Futures
One big story from 2022 is the rise of managed futures. Funds like the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) and the iMGP DBi Managed Futures Strategy ETF (DBMF) have been performance superstars, both up around 40% on the year, a remarkable feat in a year where equity markets are down double digits.
Nadig noted that in atypical year, managed futures are likely to underperform equity markets, existing as a diversifier for years like this.
Protect Your Downside
Downside protection was also in vogue in 2022 and could have a big year in 2023 as well. Low-volatility funds such as the Invesco S&P 500® Low Volatility ETF (SPLV) and the iShares MSCI USA Min Vol Factor ETF (USMV) as well as Innovator’s Defined Outcome suite are helping keep client portfolios protected.
Lydon noted that technical indicators are showing some positive signs going into Q1. Rosenbluth concurred and said, “I think the trend is starting to become the friend in a more bullish mindset heading into 2023.”
Let’s Keep the Conversation Going
If you haven’t heard, we’ll be discussing how to capitalize on these tailwinds and mitigate the headwinds at Exchange, coming February 5-8th. Join 2000 members of the investment community in Miami Beach and connect with financial advisors, thought leaders, and industry experts.
To learn more about the event and register, please visit the Exchange website.
For more news, information, and analysis, visit VettaFi | ETF Trends.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Funds like the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) and the iMGP DBi Managed Futures Strategy ETF (DBMF) have been performance superstars, both up around 40% on the year, a remarkable feat in a year where equity markets are down double digits. Global diversification is going to be important, but as noted, European indexes have “been beaten up by the strong dollar.” Bonds are also likely to see resurgence as their yields continue to look attractive. He also sees a lot of potential dynamism below the top three, with Schwab “out-Vanguarding Vanguard” with the strategy of being a low-cost producer in core beta segments. | Funds like the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) and the iMGP DBi Managed Futures Strategy ETF (DBMF) have been performance superstars, both up around 40% on the year, a remarkable feat in a year where equity markets are down double digits. Previewing the kind of insight and analysis that will be on display at Exchange, VettaFi vice chairman Tom Lydon, head of research Todd Rosenbluth, and financial futurist Dave Nadig appeared at the Investment Insights Summit last week. “It wasn’t just that everyone was chasing one thing.” He sees this as a good, healthy sign for the ETF industry, and also not unexpected in a down market year, where investors tend to pull away from high-cost, actively managed mutual funds and put their money in less expensive funds. | Funds like the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) and the iMGP DBi Managed Futures Strategy ETF (DBMF) have been performance superstars, both up around 40% on the year, a remarkable feat in a year where equity markets are down double digits. “It wasn’t just that everyone was chasing one thing.” He sees this as a good, healthy sign for the ETF industry, and also not unexpected in a down market year, where investors tend to pull away from high-cost, actively managed mutual funds and put their money in less expensive funds. Nadig continued, “That’s really compelling for folks reacting to, for the first time in a long time, an inflationary period.” Active Has a Big Year Lydon said that “the ETF industry was built on the backs of traditional indexes,” before asking whether active management’s big year, performance-wise, has changed things. | Funds like the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) and the iMGP DBi Managed Futures Strategy ETF (DBMF) have been performance superstars, both up around 40% on the year, a remarkable feat in a year where equity markets are down double digits. “It wasn’t just that everyone was chasing one thing.” He sees this as a good, healthy sign for the ETF industry, and also not unexpected in a down market year, where investors tend to pull away from high-cost, actively managed mutual funds and put their money in less expensive funds. “Mutual funds have lost $800 billion in outflows this year,” he observed. | 618154fa-76a4-4a87-8ee9-a958bd3246a5 |
708764.0 | 2022-12-20 00:00:00 UTC | DBEH Crosses 3-Year Milestone With Opportunities Ahead | DBMF | https://www.nasdaq.com/articles/dbeh-crosses-3-year-milestone-with-opportunities-ahead | nan | nan | The ETF industry continues to grow and innovate at a remarkable rate. 2022 is on track to be the second-highest year for AUMs for the industry. One of the biggest trends of the last few years has been the conversion of strategies from mutual funds and hedge funds into the ETF wrapper, a trend that IM Global Partners and Dynamic Beta investments were ahead of when they launched their two alternatives ETFs in 2019, DBMF and DBEH.
The enormously popular iMGP Dbi Managed Futures Strategy ETF (DBMF) hit its three-year milestone in May of this year, and now the iMGP Dbi Hedge Strategy ETF (DBEH) also crosses the three-year marker today. It’s a big moment for the fund that employs an equity long-short strategy, with outsized opportunities still on the horizon.
“In 2019, iMGP and DBi partnered to bring two innovative alternative ETFs to market in an easily accessible, affordable and efficient framework that provides access to DBi’s long standinginvestment researchon replication. We are thrilled to see the iMGP DBi Managed Futures Strategy ETF (ticker DBMF) and the iMGP DBi Hedge Strategy ETF (ticker DBEH) achieve such successful three-year track records and industry recognition,” Jeff Seeley, CEO of iM Global Partner US. Advisors, told VettaFi.
DBEH is actively managed and seeks long-term capital appreciation through its use of long and short positions in futures and forward contracts across equities, currencies, and fixed income. It’s modeled after the long-short equity strategy that hedge funds employ and utilizes the Dynamic Beta Engine, a proprietary, quantitative model, to determine the positions of the largest long-short equity hedge funds.
By looking across a range of equity hedge funds, the Dynamic Beta Engine is able to identify changing trends in how the hedge funds are allocated and adjust its models accordingly, creating an optimized portfolio of long and short positions that resets monthly. It also holds investment-grade debt securities such as bonds and Treasuries as collateral for the futures investments, for liquidity or to increase yield.
The Proof Is in the Performance
“Since inception, DBEH has materially outperformed developed market equities with less than half the drawdown and 300 bps per annum of alpha – for traditional portfolios, that’s a great way to raise the efficient frontier,” said Mathias Mamou-Mani, co-portfolio manager of DBEH and DBMF and managing member of Dynamic Beta investments.
Dynamic Beta investments and IM Global Partners have proven the value of this new generation of hedge fund strategy ETF products in 2022 with DBMF, which brought in over $1 billion in inflows. These types of strategies that are generally locked away to all but institutional investors can offer great diversification benefits for portfolios, and the untapped market share potential of DBEH is enormous.
The hedge fund industry had $2.2 trillion in AUM as of the end of the third quarter, according to data from EurekaHedge; in comparison, the ETF industry had over $5.9 trillion in AUM. ETFs continue to gain market share, but that growth is much smaller so far within alternatives, particularly in equity long-short strategies. The AUM for equity long-short hedge funds in the third quarter was $647 billion, compared to just $1.4 billion in AUM for long-short equity ETFs.
“Hedge fund ETFs — that work well — are a greenfield area. There’s $7 trillion in ETF assets now and a handful of basis points allocated to true hedge fund strategies,” said Andrew Beer, co-portfolio manager of DBEH and DBMF and managing member of Dynamic Beta investments.
Hedge fund strategies captured within ETFs offer a number of specific benefits that are appealing to advisors. Replication strategies often capture a multitude of hedge funds in their models and calculations, offering diversification potential and eliminating single-manager risk.
“No model allocator should fill the ‘equity long/short bucket’ with a single fund. The idiosyncratic risk of single funds – manager, sub-strategy, etc. – simply overwhelms the long-term benefits of equity long/short,” said Mamou-Mani.
Transparency and Lower Fees Put Hedge Fund ETFs Ahead
With transparent ETFs, the ease of seeing exactly how a complex strategy is positioned at any given time has great appeal for advisors and investors as well. “It’s true that most hedge fund strategies will never work in an ETF: the transparency alone is a deal killer. By investing in deep, liquid futures markets, we are more than happy for allocators to see our positions every day,” Beer explained.
One of the largest benefits to hedge fund ETFs, however, remains the savings incurred from management fees. DBEH has a management fee of 0.85%, whereas most hedge funds have a 2% management fee with an additional performance fee of 20% on profits that the hedge fund makes beyond an established threshold. By saving a significant amount through the ETF wrapper, advisors and investors are able to capture more of the alpha generated.
“Imagine investing in forty leading Equity Long/Short hedge funds at a fraction of the fees with no minimums, intraday liquidity, and a daily risk report that summarizes core factor weights? That’s what we’re trying to simulate with DBEH,” said Beer.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One of the biggest trends of the last few years has been the conversion of strategies from mutual funds and hedge funds into the ETF wrapper, a trend that IM Global Partners and Dynamic Beta investments were ahead of when they launched their two alternatives ETFs in 2019, DBMF and DBEH. The enormously popular iMGP Dbi Managed Futures Strategy ETF (DBMF) hit its three-year milestone in May of this year, and now the iMGP Dbi Hedge Strategy ETF (DBEH) also crosses the three-year marker today. We are thrilled to see the iMGP DBi Managed Futures Strategy ETF (ticker DBMF) and the iMGP DBi Hedge Strategy ETF (ticker DBEH) achieve such successful three-year track records and industry recognition,” Jeff Seeley, CEO of iM Global Partner US. | We are thrilled to see the iMGP DBi Managed Futures Strategy ETF (ticker DBMF) and the iMGP DBi Hedge Strategy ETF (ticker DBEH) achieve such successful three-year track records and industry recognition,” Jeff Seeley, CEO of iM Global Partner US. There’s $7 trillion in ETF assets now and a handful of basis points allocated to true hedge fund strategies,” said Andrew Beer, co-portfolio manager of DBEH and DBMF and managing member of Dynamic Beta investments. One of the biggest trends of the last few years has been the conversion of strategies from mutual funds and hedge funds into the ETF wrapper, a trend that IM Global Partners and Dynamic Beta investments were ahead of when they launched their two alternatives ETFs in 2019, DBMF and DBEH. | One of the biggest trends of the last few years has been the conversion of strategies from mutual funds and hedge funds into the ETF wrapper, a trend that IM Global Partners and Dynamic Beta investments were ahead of when they launched their two alternatives ETFs in 2019, DBMF and DBEH. We are thrilled to see the iMGP DBi Managed Futures Strategy ETF (ticker DBMF) and the iMGP DBi Hedge Strategy ETF (ticker DBEH) achieve such successful three-year track records and industry recognition,” Jeff Seeley, CEO of iM Global Partner US. The enormously popular iMGP Dbi Managed Futures Strategy ETF (DBMF) hit its three-year milestone in May of this year, and now the iMGP Dbi Hedge Strategy ETF (DBEH) also crosses the three-year marker today. | There’s $7 trillion in ETF assets now and a handful of basis points allocated to true hedge fund strategies,” said Andrew Beer, co-portfolio manager of DBEH and DBMF and managing member of Dynamic Beta investments. One of the biggest trends of the last few years has been the conversion of strategies from mutual funds and hedge funds into the ETF wrapper, a trend that IM Global Partners and Dynamic Beta investments were ahead of when they launched their two alternatives ETFs in 2019, DBMF and DBEH. The enormously popular iMGP Dbi Managed Futures Strategy ETF (DBMF) hit its three-year milestone in May of this year, and now the iMGP Dbi Hedge Strategy ETF (DBEH) also crosses the three-year marker today. | 2aef0871-bef5-434c-be75-9c3d083eb27c |
708765.0 | 2022-12-19 00:00:00 UTC | 2023 Could Be the Year of the Bear: Hedge With DBMF | DBMF | https://www.nasdaq.com/articles/2023-could-be-the-year-of-the-bear%3A-hedge-with-dbmf | nan | nan | Millionaire investors are expecting the S&P 500 to drop double digits in 2023, the strongest bear sentiments since the Financial Crisis of 2008, according to CNBC’s Millionaire Survey.
The survey polled 761 investors with at least $1 million in investible assets and found that 56% expect the S&P 500 will drop 10% in 2023 and almost a third are bracing for drops greater than 15%. These drops are expected to play the largest role in personal wealth loss next year, with 28% of respondents reporting the stock market as their biggest risk potential for their wealth.
“This is the most pessimistic we’ve seen this group since the financial crisis in 2008 and 2009,” according to George Walper, president of Spectrem Group that provides the survey alongside CNBC.
Next year’s losses will add to this year’s: the S&P 500 is down -19.9% YTD as of 12/19/2022.
This class of investor currently owns greater than 85% of individual stocks and their sentiment could be added pressure on already strained, volatile markets. Most millionaire investors are calculating overall investment returns of less than 4% next year, with a third anticipating negative returns, and almost half have increased their cash allocations compared to last year or are sitting on the sidelines.
It’s a reflection of their outlook for 2023 and aligns with much of the broader guidance coming from corporations: economic slowing and potential recession are in the cards for the next year. It’s taking a toll on financial advisors.
The vast majority of millionaire investors surveyed reported that they hardly discussed positioning their portfolios for inflation this year, and confidence in financial advisors dropped across the board.
“They feel that their advisors are not communicating or preparing them for how to deal with it,” Walper told CNBC. “They’re not talking to them about what all this means for their financial future.”
Hedging for Bear Markets With Managed Futures
The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. With the economic downturn and challenges ahead in 2023, DBMF could be positioned for another solid year of performance next year. At a minimum, it offers strong hedging potential for equity underperformance.
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 21.27% returns year-to-date as of 12/17/2022. It has over $1 billion in AUM and is the largest of any managed futures ETF.
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% with another 0.10% in fees for interest and dividend expenses.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “They’re not talking to them about what all this means for their financial future.” Hedging for Bear Markets With Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. With the economic downturn and challenges ahead in 2023, DBMF could be positioned for another solid year of performance next year. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | “They’re not talking to them about what all this means for their financial future.” Hedging for Bear Markets With Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. 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. With the economic downturn and challenges ahead in 2023, DBMF could be positioned for another solid year of performance next year. | “They’re not talking to them about what all this means for their financial future.” Hedging for Bear Markets With Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. With the economic downturn and challenges ahead in 2023, DBMF could be positioned for another solid year of performance next year. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | “They’re not talking to them about what all this means for their financial future.” Hedging for Bear Markets With Managed Futures The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. With the economic downturn and challenges ahead in 2023, DBMF could be positioned for another solid year of performance next year. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | 9df8c90d-ac99-41c8-af62-6a4e4050349d |
708766.0 | 2022-12-15 00:00:00 UTC | 2022: The Year of Managed Futures | DBMF | https://www.nasdaq.com/articles/2022%3A-the-year-of-managed-futures | nan | nan | 2022 was the year when markets downshifted from the rip-roaring outperformance of equities of the last two decades to fall into bear territory on multiple occasions while bond yields soared. Amidst the chaos, managed futures strategies churned away, using quantitative models to determine how asset classes were actually trending and investing accordingly, capturing major moves in oil, currencies, and more ahead of their human investing counterparts.
Most managed futures funds offered strong performance when little else did in 2022. They are a strategy that takes long and short positions on a range of asset classes within the futures market, shorting the underperforming areas (like foreign currencies in 2022) and going long asset classes that are trending upwards (like oil in the first half of the year).
“Managed futures do really, really well in a regime shift,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, told WSJ recently. “Regime shifts seem obvious in hindsight, but they’re very hard to manage.”
Image source: WSJ
The SG CTA Index which tracks the 20 largest managed futures hedge funds, is up 18% this year and is having its best year since its inception in 2000. As markets have looked to stabilize late in the year, the index has fallen 6.3% since the end of October alongside many of the stronger plays this year, such as funds focused on the strength of the U.S. dollar. Still, with much uncertainty still on the immediate horizon, the strategy could continue to perform well going into next year.
What About Managed Futures in 2023 and Beyond?
The biggest question now that advisors and investors are wondering is will the trend last? These strategies got a notoriously bad name in the pre-pandemic era of record-low rates and the equity bull market, but that was in large part to an accommodative Fed policy that worked to aggressively stamp out volatility when possible according to Yung-Shin Kung, head and CIO of Credit Suisse Asset Management’s Quantitative Investment Strategies.
“It was very much the [Fed’s] intention to reduce the amount of volatility in markets — not just via very low interest rates, but also highly unconventional monetary policy,” Kung told WSJ.
Managed futures are likely to continue to perform strongly while market volatility persists, which looks increasingly likely in the early part of the year. Recession risk also continues to grow, and the Fed has signaled that it intends to raise interest rates to at least 5% next year, with three potential rate hikes in the front half of the year. Managed futures offer their strongest performance in market downturns and while the gains may not be as outsized next year, there is still plenty of potential volatility to capitalize on.
Beyond that, it falls back to the core appeal of having a managed futures strategy within a portfolio: the diversification opportunity and hedge it provides against inflation and market regime changes, and the great unknown of what the new market normal will be on the other side of an economic downturn.
"In 2022, many advisors learned the benefits of managed futures ETFs as they experienced losses in their equity and fixed income allocations at the same time. Funds like DBMF have been a rare bright spot this year and are likely to have staying power,” said Todd Rosenbluth, head of research at VettaFi.
Something that managed futures ETFs like DBMF will have going for them as volatility slows and equities rise once more is the cost-saving potential they offer investors. DBMF has an expense ratio of 0.95% compared to capturing the strategy within a hedge fund with 2% management fees and 20% performance fees.
DBMF is actively managed and uses the Dynamic Beta Engine to analyze the trailing 60-day performance of the top 20 CTA hedge funds and then determine a portfolio of liquid contracts that mimics the hedge funds’ average performance, not their positions. It’s part of a new age of ETFs that offer hedge fund replication strategies with the transparency, convenience, and affordability of the ETF wrapper, and the future could be very bright for these strategies as we head into a new era for markets.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “Managed futures do really, really well in a regime shift,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, told WSJ recently. Funds like DBMF have been a rare bright spot this year and are likely to have staying power,” said Todd Rosenbluth, head of research at VettaFi. Something that managed futures ETFs like DBMF will have going for them as volatility slows and equities rise once more is the cost-saving potential they offer investors. | “Managed futures do really, really well in a regime shift,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, told WSJ recently. Funds like DBMF have been a rare bright spot this year and are likely to have staying power,” said Todd Rosenbluth, head of research at VettaFi. Something that managed futures ETFs like DBMF will have going for them as volatility slows and equities rise once more is the cost-saving potential they offer investors. | “Managed futures do really, really well in a regime shift,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, told WSJ recently. Funds like DBMF have been a rare bright spot this year and are likely to have staying power,” said Todd Rosenbluth, head of research at VettaFi. Something that managed futures ETFs like DBMF will have going for them as volatility slows and equities rise once more is the cost-saving potential they offer investors. | Something that managed futures ETFs like DBMF will have going for them as volatility slows and equities rise once more is the cost-saving potential they offer investors. “Managed futures do really, really well in a regime shift,” Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, told WSJ recently. Funds like DBMF have been a rare bright spot this year and are likely to have staying power,” said Todd Rosenbluth, head of research at VettaFi. | 23bad1f6-19ee-4c3a-888f-55c17b2995e3 |
708767.0 | 2022-12-14 00:00:00 UTC | Top 3 Managed Futures ETFs of 2022 | DBMF | https://www.nasdaq.com/articles/top-3-managed-futures-etfs-of-2022 | nan | nan | In the tailspin of markets in 2022, alternatives gained strong favor with investors and advisors alike. Managed futures ETFs were some of the top-performing ETFs in 2022, gaining popularity for their ability to thrive in an environment of extended volatility when equities and bonds both suffered.
Managed futures strategies proved their reputation as crisis alpha generators in 2022, capturing the market regime shift and capitalizing on changing trends, offering portfolios a strong diversification opportunity as well as solid performance by the top funds. Managed futures take both long and short positions on a range of asset classes through the futures market, and in a year when so much underperformed, that ability to be short proved a major boon.
The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM), formerly KFA Mount Lucas Index Strategy, is a fund that is positioned to capitalize on continuing changes in currencies, commodities, and global fixed income markets. The fund is up 25.25% YTD as of December 13 and has net flows of $263.91 million this year. KMLM’s benchmark is the KFA MLM Index, an index that uses a trend-following methodology, and the fund is a modified version of the MLM Index, an index that includes 11 commodities, six currencies, and five global bond markets. The fund rebalances monthly.
The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds. DBMF is up 19.51% YTD as of December 13 and has net flows of $993 million this year. 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). It invests across equities, fixed income, currencies, and commodities.
The Simplify Managed Futures Strategy ETF (CTA) was launched in March of this year and seeks long-term capital appreciation through systematic investing while attempting to create an absolute return profile with low correlation to equities. The fund is up 6.39% YTD as of December 13 and has net flows of $296 million this year. CTA utilizes systemic models designed by Altis Partners to compare recent returns of various futures contracts and analyze data points that include relative and absolute momentum signals across equities, commodities, fixed income, and currencies.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds. DBMF is up 19.51% YTD as of December 13 and has net flows of $993 million this year. Managed futures strategies proved their reputation as crisis alpha generators in 2022, capturing the market regime shift and capitalizing on changing trends, offering portfolios a strong diversification opportunity as well as solid performance by the top funds. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds. DBMF is up 19.51% YTD as of December 13 and has net flows of $993 million this year. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM), formerly KFA Mount Lucas Index Strategy, is a fund that is positioned to capitalize on continuing changes in currencies, commodities, and global fixed income markets. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds. DBMF is up 19.51% YTD as of December 13 and has net flows of $993 million this year. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM), formerly KFA Mount Lucas Index Strategy, is a fund that is positioned to capitalize on continuing changes in currencies, commodities, and global fixed income markets. | The iMGP DBi Managed Futures Strategy ETF (DBMF) is an actively managed fund that seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds. DBMF is up 19.51% YTD as of December 13 and has net flows of $993 million this year. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM), formerly KFA Mount Lucas Index Strategy, is a fund that is positioned to capitalize on continuing changes in currencies, commodities, and global fixed income markets. | 5b118e5f-d3ea-4911-8bbf-8321ce7ce458 |
708768.0 | 2022-12-08 00:00:00 UTC | Why You Should Consider Managed Futures Heading Into 2023 | DBMF | https://www.nasdaq.com/articles/why-you-should-consider-managed-futures-heading-into-2023 | nan | nan | It was a phenomenal year for most managed futures funds that utilize a strategy that capitalizes on market volatility, dislocations, and shifting trends. With volatility expected to continue well into next year and continued large moves by markets as the Fed continues its inflation fight, managed futures are well positioned for the new year.
"There are several key challenges impeding a return to a calm economic environment, making it improbable that economic conditions will settle into anything resembling their pre-pandemic stability within the next year or two at a minimum," according to AQR Capital Management.
Managed futures take long and short positions on a range of asset classes through the futures market, positioning based on how stocks are actually trading instead of based on forward estimates. They capitalize on market volatility and changing market trends, using quantitative analysis to track trends in assets.
They're called the crisis alpha generators because of their historic outperformance during times of market volatility, a trend that is anticipated to last well into 2023 as macroeconomic volatility persists. Because these funds are a trend following strategy, they also don't have a mean-reversion property, Yao Hua Ooi, principal at AQR, told Institutional Investor; a year of outperformance doesn't equate to a year of bad performance the following year.
"For those two reasons, we are trying to help investors focus more on the long-term diversification benefit of adding managed futures to their portfolio and not be so worried about timing," Ooi said.
For advisors that may be worried about having missed the boat on managed futures, there is still a wealth of opportunity in at least the next year as the strategy is likely to benefit particularly in a rising rate environment, according to Jon Caplis, CEO of PivotalPath. Aside from the performance potential, these strategies have proven a noteworthy hedge for portfolios in the last year against inflation and rising rates.
Investing in Managed Futures with DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022.
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 21.26% returns year-to-date as of 12/07/2022. It has over $1 billion in AUM and is the largest of any managed futures ETF.
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 an expense ratio of 0.95%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Investing in Managed Futures with DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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 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. Investing in Managed Futures with DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. | Investing in Managed Futures with DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | Investing in Managed Futures with DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes uncorrelated to traditional equities or bonds. 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. | 7451c834-593f-455a-b2f1-42e3c09a6d15 |
708769.0 | 2022-12-05 00:00:00 UTC | 3 ETFs in “Oversold” Territory to Start the Week | DBMF | https://www.nasdaq.com/articles/3-etfs-in-oversold-territory-to-start-the-week | nan | nan | Technical analysis can tell investors a lot about both stocks and ETFs, including when some might have been overbought, or even oversold. Based on the Relative Strength Index (RSI) Indicator, which looks at a fund or stock’s price over a 14-day period, here are three ETFs that have recently broken into oversold territory and could be worth considering.
The iMGP DBi Managed Futures Strategy ETF (DBMF)
DBMF hit 27.82 as of December 2, having crossed into oversold territory, or under 30 based on the RSI indicator, around the turn of the month. The strategy is actively managed and aims to broadly emulate the performance of certain Commodity Trading Advisor hedge funds by using long and short positions in futures and forwards across asset classes.
The oversold ETF can allocate to a Cayman-based subsidiary for its commodities exposures, with its model also including a volatility target. DBMF charges an 85 basis point fee, having taken in net inflows of $40.5 million in net inflows over the last month. With its focus on alternatives and total return, it could be an appealing strategy for the right investor.
The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM)
KMLM also works in alternatives and absolute returns. Actively managed, the ETF currently sits at an RSI indicator of 28.8, having dipped into oversold territory a few times in November prior to its recent reentry.
The strategy from KraneShares also uses its long and short positions to work with commodity, currency, and global fixed income futures. KMLM has taken in net inflows of $118 million over the last three months, with limited volatility. The ETF saw 43.8% volatility over the last five days according to VettaFi, with no more than 25% over any of its 20-, 50-, or 200-day volatility metrics.
The ProShares UltraShort Nasdaq Biotechnology ETF (BIS)
BIS tracks the NASDAQ Biotechnology Index (-200%) and recently dipped into oversold territory, hitting 29.82 on the RSI indicator. The oversold ETF charges a 95 basis point fee and aims to short certain biotech stocks, offering a powerful tool for those investors who have a short-term, bearish outlook on biotech or pharmaceuticals.
While not for everyone, the strategy may appeal to those investors who look to make tactical moves. BIS has broadly equaled the performance of the Factset Segment Average in which it is categorized according to VettaFi.
For more news, information, and strategy, visit the China Insights Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) DBMF hit 27.82 as of December 2, having crossed into oversold territory, or under 30 based on the RSI indicator, around the turn of the month. DBMF charges an 85 basis point fee, having taken in net inflows of $40.5 million in net inflows over the last month. Based on the Relative Strength Index (RSI) Indicator, which looks at a fund or stock’s price over a 14-day period, here are three ETFs that have recently broken into oversold territory and could be worth considering. | The iMGP DBi Managed Futures Strategy ETF (DBMF) DBMF hit 27.82 as of December 2, having crossed into oversold territory, or under 30 based on the RSI indicator, around the turn of the month. DBMF charges an 85 basis point fee, having taken in net inflows of $40.5 million in net inflows over the last month. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) KMLM also works in alternatives and absolute returns. | The iMGP DBi Managed Futures Strategy ETF (DBMF) DBMF hit 27.82 as of December 2, having crossed into oversold territory, or under 30 based on the RSI indicator, around the turn of the month. DBMF charges an 85 basis point fee, having taken in net inflows of $40.5 million in net inflows over the last month. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) KMLM also works in alternatives and absolute returns. | The iMGP DBi Managed Futures Strategy ETF (DBMF) DBMF hit 27.82 as of December 2, having crossed into oversold territory, or under 30 based on the RSI indicator, around the turn of the month. DBMF charges an 85 basis point fee, having taken in net inflows of $40.5 million in net inflows over the last month. The KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) KMLM also works in alternatives and absolute returns. | 758923af-62f1-4879-9dbc-70869ffaab96 |
708770.0 | 2022-12-05 00:00:00 UTC | Smooth Out Volatility in 2023 With DBMF | DBMF | https://www.nasdaq.com/articles/smooth-out-volatility-in-2023-with-dbmf | nan | nan | As 2022 comes to a close, volatility could still be a thorn in the side of capital markets in 2023. Per a Business Insider article, Morgan Stanley is forecasting “extreme volatility” in the new year.
The CBOE Volatility Index, or simply the VIX, has reached over 100% this year, particularly in the early goings of 2022. While it has waned recently, it doesn't mean investors are in the clear.
The rising tide of consumer prices has market experts looking back at yesteryear when inflation was also causing fits for investors. This includes the 1940s and 1970s in particular.
“We don’t think it’s the 70s, we think it’s more of the 40s, where it’s a boom-bust,” Morgan Stanley chief investment officer Mike Wilson told CNBC. Stanley compared the current inflation cycle to the demand-driven inflation that took root in the economy after World War II.
As the Business Insider article explained, “the 40s, supply and demand eventually balanced out – but inflation remained sticky, which could be a clue to what lies ahead for the economy next year, Wilson said.”
If this projection holds, it appears that inflation won’t be waning, at least not anytime soon. Therefore, investors may want to continue adding inflation and volatility hedges.
“Already, that trend is starting to show, and despite softening demand and improving supply issues, inflation is still well above the Fed’s 2% target, with prices barely cooling to 7.7% in October.”
“Inflation can’t ebb as quickly as it flows when demand falls by the wayside and supply picks up. And that’s exactly what we see in 2023,” Wilson said.
Smooth Out Volatility With DBMF
While investors can employ a number of hedging opportunities, there's an easier way to extract gains. The iMGP DBi Managed Futures Strategy ETF (DBMF) essentially has a built-in hedging component by using an active management strategy — this allows for dynamic changes to the portfolio when market conditions warrant a change.
DBMF invests in a variety of assets, allowing for the diversification of portfolios with non-correlation to traditional equities or bonds. It utilizes long and short positions within the futures market on several asset classes: domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
At the heart of DBMF's strategy is the Dynamic Beta Engine. This proprietary, quantitative model attempts to determine how the largest commodity-trading advisor (CTA) hedge funds have their allocations.
The engine 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.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Smooth Out Volatility With DBMF While investors can employ a number of hedging opportunities, there's an easier way to extract gains. The iMGP DBi Managed Futures Strategy ETF (DBMF) essentially has a built-in hedging component by using an active management strategy — this allows for dynamic changes to the portfolio when market conditions warrant a change. DBMF invests in a variety of assets, allowing for the diversification of portfolios with non-correlation to traditional equities or bonds. | 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. Smooth Out Volatility With DBMF While investors can employ a number of hedging opportunities, there's an easier way to extract gains. The iMGP DBi Managed Futures Strategy ETF (DBMF) essentially has a built-in hedging component by using an active management strategy — this allows for dynamic changes to the portfolio when market conditions warrant a change. | The iMGP DBi Managed Futures Strategy ETF (DBMF) essentially has a built-in hedging component by using an active management strategy — this allows for dynamic changes to the portfolio when market conditions warrant a change. 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. Smooth Out Volatility With DBMF While investors can employ a number of hedging opportunities, there's an easier way to extract gains. | Smooth Out Volatility With DBMF While investors can employ a number of hedging opportunities, there's an easier way to extract gains. The iMGP DBi Managed Futures Strategy ETF (DBMF) essentially has a built-in hedging component by using an active management strategy — this allows for dynamic changes to the portfolio when market conditions warrant a change. DBMF invests in a variety of assets, allowing for the diversification of portfolios with non-correlation to traditional equities or bonds. | a7e1d68b-dfcc-48fd-a60e-20f4fcaccb5b |
708771.0 | 2022-11-29 00:00:00 UTC | ETF Prime: Tom Hendrickson on the Growing Popularity of Alternatives | DBMF | https://www.nasdaq.com/articles/etf-prime%3A-tom-hendrickson-on-the-growing-popularity-of-alternatives | nan | nan | On the most recent episode of ETF Prime, host Nate Geraci and Tom Hendrickson, VettaFi’s chief product and innovation officer talk about the strong interest in alternatives in 2022. Later Geraci was joined by Giang Bui, head of U.S. exchange traded products at Nasdaq, to discuss ETF trends in 2022 and a look towards 2023. Finally, Kristof Gleich, president and CIO of Harbor Capital Advisors, was on to chat about Harbor’s investment approach to ETFs and highlight their funds.
Prolonged market volatility in 2022 has given rise to an environment in which many alternative strategies that struggled previously are now performing strongly. Alternatives aren’t just a vanilla strategy though, often using complex components and approaches that require a solid understanding of what exactly is under the hood before investing, cautioned Hendrickson.
The changes in the market and economy this year have caused “advisors to think about things differently and I think that’s where we’re seeing an uptick in research in this area,” Hendrickson explained. The inherent complexity of alternatives has long proven a barrier for advisors, creating a sort of “black box” around alts that VettaFi is working to deconstruct through offerings such as livecasts, webcasts, and research.
Alternatives Shine In the Eyes of Advisors
Geraci pointed out that it’s the unique nature of ETFs and their ability to “democratize investing” that unlocked alternatives strategies that had previously only been available through hedge funds or to institutional investors, driving a wave of interest and research into alts ETFs.
Hendrickson collated data on advisor interest in alternatives beginning in the fourth quarter of 2020 as a baseline and moving forward through now on advisor research into alts on the VettaFi platform. “What I saw was an extremely discernible trend,” he explained, detailing flat interest over the course of 2021 compared to 2020 and then a 30% increase in interest in Q1 2022, 60% increase in Q2, 62% increase in Q3, and 70% so far in Q4 (all compared to Q4 2020).
Managed Futures Soar in 2022
Alts ETFs that have seen enormous engagement on VettaFi’s platform in 2022 are managed futures, which take long and short positions in the futures market on a variety of asset classes.
Top ETFs include the iMGP DBi Managed Futures Strategy ETF (DBMF) which has crossed the $1 billion AUM threshold in 2022 after beginning the year with just $60 million, as well as the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) that has seen strong inflows this year. Other managed futures ETFs that have seen inflows in 2022 include the Simplify Managed Futures Strategy ETF (CTA) and the First Trust Managed Futures Strategy Fund (FMF).
Managed futures, and alts in general, can provide strong value and diversification opportunities for portfolios and have been extremely attractive this year, outperforming when bonds and stocks have both struggled. Because they are complex strategies, however, advisors have due diligence to understand how each individual strategy works before incorporating it into a client’s portfolio.
Top ETF Takeaways for 2022
The sustained growth and popularity of ETFs and ETPs have meant that Nasdaq has tripled its ETP team in the last year as well as adding over 100 new or transferred ETPs to the Nasdaq exchange and 20 new issuers listed with Nasdaq. Nasdaq has also worked to improve ETF trading this year as well, fine-tuning its auction collars and adding investor protections, as well as increasing investor education.
Giang Bui, head of U.S. exchange traded products at Nasdaq, explained that the growth of the ETF industry itself was a noteworthy one for 2022, with more than 3,000 ETPs listed on exchanges for the first time, having grown from 2,000 listed in just five years. “ETF inflows are still very strong: we’re at about $570 billion inflows this year so we’re on track to be our second best year, ever.” 2021 takes first place at $933.5 billion in inflows into ETFs.
It’s a strong counterpoint to the $790 billion in outflows from mutual funds and showcases the growing preference for the ETF wrapper.
Another point of interest was crypto volatility but specifically crypto futures ETFs and their ability to perform as intended amidst pronounced volatility and massive volumes post-FTX collapse, tracking the prices with tight spreads and high liquidity. It “really enforces the story that ETFs are resilient; they become a vehicle for liquidity during times of stress,” Bui said.
Looking ahead, Bui believes that conversions from mutual fund strategies into the ETF wrapper will continue to be a big trend, large regulatory proposals within the equity markets will be introduced and continued flows into ETFs even if a recession occurs.
Harbor Capital Enters ETF Industry In Big Way
Harbor Capital Advisors launched its first ETF at the end of last year and now has 11 ETFs it has brought to market, eight of those launched this year. Kristof Gleich, president and CIO at Harbor Capital, explained the established background of the firm over the last 35 years and its move from catering mostly to institutional investors to making its strategies readily available through ETFs.
“We believe that ETFs are both the present and the future of investing and carry many advantages over other vehicles,” Gleich said.
The Harbor Scientific Alpha Income ETF (SIFI) and the Harbor Scientific Alpha High-Yield ETF (SIHY) were the first ETFs launched by the firm in 2021. Harbor Capital believes that to constantly generate high risk-adjusted returns, investors need to continually innovate. SIHY and SIFI both take scientific, thematic approaches to fixed income investing and use systematic, quantitative-driven strategies, an uncommon approach within fixed income.
The Harbor All-Weather Inflation Focus ETF (HGER) uses commodities to hedge against inflation, dynamically adjusting its commodity exposures depending on what stage of the inflation cycle markets are in. The fund is currently heavy on gold futures (currently 40% of the fund) because “some of the economic indicators are weakening. It’s likely that this environment of dollar strength that we’ve had is coming to an end and that’s all setting up quite nicely that gold relative to other commodities should do quite well.”
Listen to the entire ETF Prime conversation here:
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Top ETFs include the iMGP DBi Managed Futures Strategy ETF (DBMF) which has crossed the $1 billion AUM threshold in 2022 after beginning the year with just $60 million, as well as the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) that has seen strong inflows this year. On the most recent episode of ETF Prime, host Nate Geraci and Tom Hendrickson, VettaFi’s chief product and innovation officer talk about the strong interest in alternatives in 2022. The inherent complexity of alternatives has long proven a barrier for advisors, creating a sort of “black box” around alts that VettaFi is working to deconstruct through offerings such as livecasts, webcasts, and research. | Top ETFs include the iMGP DBi Managed Futures Strategy ETF (DBMF) which has crossed the $1 billion AUM threshold in 2022 after beginning the year with just $60 million, as well as the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) that has seen strong inflows this year. Giang Bui, head of U.S. exchange traded products at Nasdaq, explained that the growth of the ETF industry itself was a noteworthy one for 2022, with more than 3,000 ETPs listed on exchanges for the first time, having grown from 2,000 listed in just five years. Harbor Capital Enters ETF Industry In Big Way Harbor Capital Advisors launched its first ETF at the end of last year and now has 11 ETFs it has brought to market, eight of those launched this year. | Top ETFs include the iMGP DBi Managed Futures Strategy ETF (DBMF) which has crossed the $1 billion AUM threshold in 2022 after beginning the year with just $60 million, as well as the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) that has seen strong inflows this year. Other managed futures ETFs that have seen inflows in 2022 include the Simplify Managed Futures Strategy ETF (CTA) and the First Trust Managed Futures Strategy Fund (FMF). Harbor Capital Enters ETF Industry In Big Way Harbor Capital Advisors launched its first ETF at the end of last year and now has 11 ETFs it has brought to market, eight of those launched this year. | Top ETFs include the iMGP DBi Managed Futures Strategy ETF (DBMF) which has crossed the $1 billion AUM threshold in 2022 after beginning the year with just $60 million, as well as the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) that has seen strong inflows this year. Finally, Kristof Gleich, president and CIO of Harbor Capital Advisors, was on to chat about Harbor’s investment approach to ETFs and highlight their funds. Hendrickson collated data on advisor interest in alternatives beginning in the fourth quarter of 2020 as a baseline and moving forward through now on advisor research into alts on the VettaFi platform. | e33d5e88-051d-45e1-b111-46569c7e519d |
708772.0 | 2022-11-28 00:00:00 UTC | DBMF Crosses Below Key Moving Average Level | DBMF | https://www.nasdaq.com/articles/dbmf-crosses-below-key-moving-average-level | nan | nan | In trading on Monday, shares of the DBMF ETF (Symbol: DBMF) crossed below their 200 day moving average of $31.48, changing hands as low as $31.31 per share. DBMF shares are currently trading off about 0.2% on the day. The chart below shows the one year performance of DBMF shares, versus its 200 day moving average:
Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.45.
Click here to find out which 9 other ETFs recently crossed below their 200 day moving average »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In trading on Monday, shares of the DBMF ETF (Symbol: DBMF) crossed below their 200 day moving average of $31.48, changing hands as low as $31.31 per share. The chart below shows the one year performance of DBMF shares, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.45. DBMF shares are currently trading off about 0.2% on the day. | In trading on Monday, shares of the DBMF ETF (Symbol: DBMF) crossed below their 200 day moving average of $31.48, changing hands as low as $31.31 per share. The chart below shows the one year performance of DBMF shares, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.45. DBMF shares are currently trading off about 0.2% on the day. | In trading on Monday, shares of the DBMF ETF (Symbol: DBMF) crossed below their 200 day moving average of $31.48, changing hands as low as $31.31 per share. The chart below shows the one year performance of DBMF shares, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.45. DBMF shares are currently trading off about 0.2% on the day. | In trading on Monday, shares of the DBMF ETF (Symbol: DBMF) crossed below their 200 day moving average of $31.48, changing hands as low as $31.31 per share. DBMF shares are currently trading off about 0.2% on the day. The chart below shows the one year performance of DBMF shares, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.45. | 90d7a0ee-6edb-47c2-80b8-45e80057ff10 |
708773.0 | 2022-11-22 00:00:00 UTC | ETF Prime: Todd Rosenbluth Gives Thanks, Plus Crypto and Options-Based Strategies | DBMF | https://www.nasdaq.com/articles/etf-prime%3A-todd-rosenbluth-gives-thanks-plus-crypto-and-options-based-strategies | nan | nan | On this week's ETF Prime, VettaFi's Todd Rosenblugh spoke with host Nate Geraci about all the things he's thankful for in the ETF industry this year. Later, Bitwise's Matt Hougan discusses the FTX debacle, along with the future of crypto and possible crypto ETFs. Finally, NEOS Investments' Troy Cates highlights their unique, options-based ETF lineup.
Kicking things off, Rosenbluth may be favoring Michigan over Ohio St. this weekend, but he's much happier covering the things he's thankful for in the world of ETFs, as noted in his article, "Thankful Times in the ETF Industry," which highlights several ETF items certainly worth pointing out. Among those notable things is the fact that ETFs have already gathered $500 billion in assets this year. "Money has consistently been moving out of equity mutual funds, year after year, and into ETFs," Rosenbluth points out, which has remained the case in 2022. It's a great sign for sure when considering the flow of things. While it may have been the worst year for bonds in Barclays/Agg history, yet there's been so much movement into fixed income ETFs as a counter. It's not a huge surprise on the equity side, which, in turn, tends to bode well for the ETF market. However, seeing fixed income prosper in such a way has been quite the shock. Geraci even goes on to say he's willing to believe that we will see $1 trillion in inflows, assuming the markets don't suddenly plummet. Rosenbluth is inclined to agree, given all the room ahead for the ETF industry, let alone the current standing of things. Rosenbluth goes on to note the other things he's thankful for, such as how well-established asset managers have embraced ETFs and the fact that advisors have been willing to work with lesser-known ETF providers. That latter point has led to success for firms such as Horizon Kinetics with their first fund, the Horizon Kinetics Inflation Beneficiary ETF (INFL), or iMGP's alternative products, such as the iMGP DBi Managed Futures ETF (DBMF). Many thanks are also given to VettaFi, which Geraci matches by noting, "from my perch, it has been really fun to watch everything at VettaFi this year. It is amazing to see everything come together with the brand. To see the quality of the content now being published and talked about on a daily basis. It has been a lot of fun to watch, and I'm very happy for you."
Crypto Difficulties All Over
Later, Matt Hougan, chief investment officer at Bitwise Asset Management, arrives to talk plenty about, for better or worse, the frequently popular topic of crypto. There's time here to get into the FTX situation and what it means for mainstream crypto adoption, mainstream regulation, and the possibility of a spot bitcoin ETF. In a general sense, Hougan is not dancing around the fact that crypto had a challenging year. The Fed shifted from quantitative easing to quantitative tightening, which drove crypto markets down. Since then, there's been a cascading credit crisis claiming multiple victims, including crypto hedge funds and, of course, FTX, which was exposed as a fraud. This has left crypto prices down 70-75% from their all-time high. Looking at the perception of crypto, Hougan knows there is justified skepticism and feels the market may have been set back 6-12 months. It's not the worst pullback for crypto, but the market has learned from this. As Hougan explains, when peeling back the layers revolving around the negative moments and looking at the fundamentals of crypto, they're actually relatively strong. More developers are working with crypto. There's more venture capital money moving through crypto than ever. Active user numbers are up. It's a lot of positives, and yet there's going to be a trust-based setback that will have an effect or a period here. There's also time for them to discuss two Bitwise funds, including the Bitwise Crypto Industry Innovators ETF (BITQ) and the Bitwise Web3 ETF (BWEB), which just rolled out at the beginning of October. BITQ is, of course, the first ETF that allowed crypto to be noted within the name, and it supports the infrastructure on which crypto sits. BWEB is more wrapped up with innovative financial and tech leaders.
The Options Are Out There
Coming in last but not least is Troy Cates, co-founder and managing partner of NEOS Investments, which, back in August, launched an initial suite of next-evolution income ETFs. These funds offer exposure to the S&P 500, the Bloomberg Aggregate Bond Index, and short-term U.S. treasuries. They use options-based strategies to generate additional income on top of the underlying exposure offered by each ETF. Looking at options-based ETFs, they have been an area for pretty significant growth for the ETF market overall, between the shifting marketing environment and regulation changes. For Cates, after working in the options space for over a decade, the opportunity came from early products that included passively managed tracking indexes, leading into the active space. From there, the space continued to grow, leading to new providers and NEOS going forward to capture the next evolution of this area, which the funds are, of course, named after.
Listen to the entire ETF Prime conversation here:
For more ETF Prime podcast episodes, visit our ETF Prime channel. Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That latter point has led to success for firms such as Horizon Kinetics with their first fund, the Horizon Kinetics Inflation Beneficiary ETF (INFL), or iMGP's alternative products, such as the iMGP DBi Managed Futures ETF (DBMF). Since then, there's been a cascading credit crisis claiming multiple victims, including crypto hedge funds and, of course, FTX, which was exposed as a fraud. The Options Are Out There Coming in last but not least is Troy Cates, co-founder and managing partner of NEOS Investments, which, back in August, launched an initial suite of next-evolution income ETFs. | That latter point has led to success for firms such as Horizon Kinetics with their first fund, the Horizon Kinetics Inflation Beneficiary ETF (INFL), or iMGP's alternative products, such as the iMGP DBi Managed Futures ETF (DBMF). Finally, NEOS Investments' Troy Cates highlights their unique, options-based ETF lineup. There's also time for them to discuss two Bitwise funds, including the Bitwise Crypto Industry Innovators ETF (BITQ) and the Bitwise Web3 ETF (BWEB), which just rolled out at the beginning of October. | That latter point has led to success for firms such as Horizon Kinetics with their first fund, the Horizon Kinetics Inflation Beneficiary ETF (INFL), or iMGP's alternative products, such as the iMGP DBi Managed Futures ETF (DBMF). Later, Bitwise's Matt Hougan discusses the FTX debacle, along with the future of crypto and possible crypto ETFs. Kicking things off, Rosenbluth may be favoring Michigan over Ohio St. this weekend, but he's much happier covering the things he's thankful for in the world of ETFs, as noted in his article, "Thankful Times in the ETF Industry," which highlights several ETF items certainly worth pointing out. | That latter point has led to success for firms such as Horizon Kinetics with their first fund, the Horizon Kinetics Inflation Beneficiary ETF (INFL), or iMGP's alternative products, such as the iMGP DBi Managed Futures ETF (DBMF). On this week's ETF Prime, VettaFi's Todd Rosenblugh spoke with host Nate Geraci about all the things he's thankful for in the ETF industry this year. Later, Bitwise's Matt Hougan discusses the FTX debacle, along with the future of crypto and possible crypto ETFs. | 944b9f6d-435f-496a-9981-8e7d2fa5498f |
708774.0 | 2022-11-21 00:00:00 UTC | Forget Chasing Bear Rallies: The Benefits of Managed Futures | DBMF | https://www.nasdaq.com/articles/forget-chasing-bear-rallies%3A-the-benefits-of-managed-futures | nan | nan | The strong yet brief bear rally, borne on hopes of easing inflation from October inflation data, has come to an abrupt end heading into the short Thanksgiving week for U.S. markets. Volatility remains a persistent component of markets this year, something that managed futures strategies can capitalize on alongside the numerous benefits they can offer portfolios.
Managed futures strategies, sometimes referred to as CTAs after the commodity trading advisors that run them, transact in the futures market where they take long and short positions on several asset classes based on how they are trending currently. They’re essentially the ultimate trend-following strategy that distills out the emotional side of investing and is purely based on data instead of investor sentiment and have historically been locked behind hedge funds but have moved into cost-saving ETFs in the last few years.
Trend-following strategies historically perform well during market changes and managed futures have been dubbed the “crisis alpha” generators of market dislocations and regime changes. In this year of continued uncertainty and market volatility, they have risen to the top, often some of the only ETFs to offer positive performance when equities and bonds have fallen.
Managed futures take long, or bullish, positions on asset classes that are trending positively — a big win this year was long crude oil positions in the first half of the year — and take short, or bearish, positions on asset classes that are trending negatively. This year that’s been just about everything else, including equities and bonds, but particularly foreign currencies that have felt the squeeze from a strong U.S. dollar.
These kinds of strategies are “a natural candidate for inflation protection without sacrificing long-term returns,” explained David Berns, CIO and co-founder of Simplify, in an interview with Wealth Solutions Report. “And if inflation is accompanied by rising rates, trend following on bonds will also contribute nicely to the return profile during inflationary periods.”
Because of their dynamic nature in the futures market, they can respond to the changing market landscape while providing uncorrelated returns and diversification for equity and bond portfolios. When equity stocks in a portfolio (inherently expressed in long positions) are falling, managed futures can take short positions, offering diversification. The same is true for bonds in a rising rate environment, with managed futures able to short bonds while portfolios hold traditional long positions in bonds.
“These alternative investments have historically been less correlated to long stocks or bonds, performing better in down markets,” said Todd Rosenbluth, head of research at VettaFi, in the same interview. “Advisors who are looking to provide enhanced diversification to a client’s portfolio should consider up to a 5% slice into managed futures.”
Investing in Managed Futures With DBMF
The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022.
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 25.77% returns year-to-date as of 11/18/2022. It has over $1 billion in AUM and is the largest of any managed futures ETF.
DBMF allows for the diversification of portfolios across asset classes that are 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 position that the fund takes 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 has an expense ratio of 0.95%.
For more news, information, and analysis, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “Advisors who are looking to provide enhanced diversification to a client’s portfolio should consider up to a 5% slice into managed futures.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. DBMF has an expense ratio of 0.95%. | “Advisors who are looking to provide enhanced diversification to a client’s portfolio should consider up to a 5% slice into managed futures.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. DBMF has an expense ratio of 0.95%. | “Advisors who are looking to provide enhanced diversification to a client’s portfolio should consider up to a 5% slice into managed futures.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. DBMF has an expense ratio of 0.95%. | DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. “Advisors who are looking to provide enhanced diversification to a client’s portfolio should consider up to a 5% slice into managed futures.” Investing in Managed Futures With DBMF The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. DBMF has an expense ratio of 0.95%. | 85782b19-39aa-49a5-ae1b-c4d2abf3a89c |
708775.0 | 2022-11-21 00:00:00 UTC | Thankful Times in the ETF Industry | DBMF | https://www.nasdaq.com/articles/thankful-times-in-the-etf-industry | nan | nan | There is a lot to be thankful for in the ETF industry in 2022 despite global equity and bond markets remaining under pressure from high inflation and the aggressive actions of central banks that could result in prolonged economic weakness.
U.S.-listed ETFs Already Gathered More Than $500 Billion in Assets.
While mutual funds continue to bleed assets, 2022 should end up being the year with the second-highest ETF industry net inflows. Advisors and end clients have embraced the ease of use, liquidity, tax efficiency, and typically low costs that ETFs offer relative to mutual funds. Investors put $365 billion into equity ETFs as of mid-November, while redeeming approximately $335 billion from equity mutual funds, consistent with intermediate-term trends. ETFs like the iShares Core S&P 500 ETF (IVV) and the Vanguard Total Stock Market ETF (VTI) continued to gather significant assets in 2023.
However, bond mutual fund investors have been much more loyal over the years, which is why the $475 billion that have been pulled from fixed income mutual funds in 2022, in stark contrast to the $165 billion that was moved into fixed income ETFs, came as such a surprise.
This year is likely to be one of the worst years (if not the worst year of all) for the Bloomberg Aggregate Bond Index, a key benchmark used for core fixed income mutual funds. While some active mutual funds have performed better, many advisors and clients have chosen to shift to ETFs, where interest rate sensitivity can be better controlled. Indeed, short-term ETFs like the iShares 1-3 Year Treasury Bond ETF (SHY) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) have been among the more popular products.
I am thankful that advisors have stayed the course and/or protected the downside to keep clients invested rather than trying to time the market and missing out on what will be eventual market recovery.
More Well-Established Asset Managers Have Embraced ETFs.
While in the recent past, firms like Goldman Sachs, JPMorgan, and T. Rowe Price pushed into the ETF market, this year many of the holdouts joined the party. For example, Capital Group, the firm behind American Funds, launched its first nine ETFs, including the Capital Group Dividend Value ETF (CGDV), which organically gathered $1 billion in assets. Meanwhile, firms like AllianceBernstein, DoubleLine, and Matthews Asia have rolled out the AB Ultra Short Income ETF (YEAR), the DoubleLine Shiller CAPE US Equity ETF (CAPE), and the Matthews Asia Innovators ETF (MINV), among others in 2023.
I am thankful that ETF-oriented advisors have more actively managed products from firms they have long trusted.
Advisors Have Been Willing to Try Working With Lesser-Known ETF Providers.
The previously mentioned new entrants joined a relatively concentrated ETF market with BlackRock, Vanguard, and State Street Global Advisors managing 78% of ETF assets at the end of October. While I don’t begrudge the big three their success, the ETF industry is more exciting when firms burst on the scene either with a successful new product or an under-the-radar fund gains unexpected traction.
For example, the Horizon Kinetics Inflation Beneficiary ETF (INFL) launched as the firm’s first ETF in January 2021 and was already managing $1.4 billion in assets across sectors such as energy, financials, and materials. The iMGP DBi Managed Futures ETF (DBMF) launched in May 2019 but had limited assets as of the end of 2021. However, the alternatives product gathered $1 billion alone in 2022 and has $1.1 in assets.
I am thankful that there’s room for smaller providers to have a chance to succeed.
Lastly, I am thankful to have joined the firm that became VettaFi in March 2022. I previously worked as the sole public-facing ETF voice in a broaderinvestment researchfirm with smart people who were largely focused elsewhere.
Now I spend hours each day working with our skilled ETF-focused editorial team, our well-organized ETF-focused webcast team, our creative ETF-focused marketing team, our thought-provoking ETF and index research team, and many others that have a similar passion for educating advisors and end clients.
One of the ways we plan to support the investment community is with the Exchange conference in February 2023. If you have not signed up, you can save before year-end. You can thank me in person in Florida.
For more news, information, and strategy, visit VettaFi.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures ETF (DBMF) launched in May 2019 but had limited assets as of the end of 2021. There is a lot to be thankful for in the ETF industry in 2022 despite global equity and bond markets remaining under pressure from high inflation and the aggressive actions of central banks that could result in prolonged economic weakness. Advisors and end clients have embraced the ease of use, liquidity, tax efficiency, and typically low costs that ETFs offer relative to mutual funds. | The iMGP DBi Managed Futures ETF (DBMF) launched in May 2019 but had limited assets as of the end of 2021. For example, Capital Group, the firm behind American Funds, launched its first nine ETFs, including the Capital Group Dividend Value ETF (CGDV), which organically gathered $1 billion in assets. Meanwhile, firms like AllianceBernstein, DoubleLine, and Matthews Asia have rolled out the AB Ultra Short Income ETF (YEAR), the DoubleLine Shiller CAPE US Equity ETF (CAPE), and the Matthews Asia Innovators ETF (MINV), among others in 2023. | The iMGP DBi Managed Futures ETF (DBMF) launched in May 2019 but had limited assets as of the end of 2021. ETFs like the iShares Core S&P 500 ETF (IVV) and the Vanguard Total Stock Market ETF (VTI) continued to gather significant assets in 2023. Indeed, short-term ETFs like the iShares 1-3 Year Treasury Bond ETF (SHY) and the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) have been among the more popular products. | The iMGP DBi Managed Futures ETF (DBMF) launched in May 2019 but had limited assets as of the end of 2021. U.S.-listed ETFs Already Gathered More Than $500 Billion in Assets. More Well-Established Asset Managers Have Embraced ETFs. | bf2212c6-5c1d-49ed-8a87-e976f9208943 |
708776.0 | 2022-11-18 00:00:00 UTC | Managed Futures Could Benefit From Continued Fed Aggression | DBMF | https://www.nasdaq.com/articles/managed-futures-could-benefit-from-continued-fed-aggression | nan | nan | Economic indicators are largely pointing to slowing and a potential easing of inflation but not at a satisfactory rate according to St. Louis Federal Reserve President James Bullard. A continuation of Fed aggression through rate hikes could have serious economic repercussions but managed futures, a strategy that can take long — and most importantly short — positions on a number of asset classes are positioned to ride the turning economic tides.
Bullard is a voting member of the FOMC that sets monetary policy and made comments recently that the “policy rate is not yet in a zone that may be considered sufficiently restrictive,” reported CNBC.
The St. Louis Fed President is using economic standards based on work by Stanford economics professor John Taylor, dubbed the Taylor Rule. It’s an algebraic equation that calculates where interest rates should be based on inflation and real GDP, and applying the Taylor Rule to current inflation puts Fed terminal rates somewhere between 5%-7%, 100 basis points higher than the current rate of 3.75%-4%.
“Thus far, the change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023,” Bullard said.
Under this approach, the lowest bounds would be 5% interest rates to put monetary policy in a meaningfully restrictive range, according to Bullard. Markets currently are forecasting 5% as the terminal upper end of rate hikes by mid-2023.
Not all Fed officials share this kind of outlook: Esther George, Kansas City Fed President, told the WSJ, “I have not in my 40 years with the Fed seen a time of this kind of tightening that you didn’t get some painful outcomes.”
Some Fed officials have gone on record in support of an easing to a 0.50% increase at December’s FOMC meeting, but there is unified caution — no matter the outlook — on the Fed ceasing rate hikes too soon.
“For me, the more important question for this committee, looking out over next year, is being careful not to stop too soon,” George said. “This was the lesson of the 1970s and ’80s, is thinking, ‘Oh, we’ve got it now, we can stop,’ and then you find that inflation really reemerges in some way.”
The Shorts Can Ride Out Fed Aggression
Managed futures have been a popular go-to this year for hedging portfolios against volatility as well as providing strong performance. Because they invest in the futures market, they can provide a non-correlated return stream from stocks and bonds for portfolios.
"When rates are higher, 60/40 stops working as stocks and bonds tend to move up and down together. This means investors need strategies, like managed futures, that can go short when necessary," explained Andrew Beer, co-portfolio mananger of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, in a communication to VettaFi.
Any advisor can invest directly in a stock or bond, expressing a long position in that security, but managed futures are particularly appealing for their ability to take short positions on a range of asset classes. What’s more, because they invest based on how assets are actually trending, they respond dynamically to changing market positions and capitalize on dislocations and volatility. Their ability to be short on Treasuries as well as other asset classes that are negatively impacted by Fed aggression makes them an appealing investment heading into 2023.
That ability has been a boon this year when volatility has been pronounced and drawn out. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022.
"While recent market volatility has caused CTAs to dial back some risk, we believe they still are positioned for higher rates and more market turmoil," said Beer.
Recent position changes in DBMF currently have the fund now short crude oil and long the yen and EAFE equities, with shorts on the remaining currencies it is invested in, as well as short Treasuries and commodities as of 11/17/22.
The position that the fund takes 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 has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. This means investors need strategies, like managed futures, that can go short when necessary," explained Andrew Beer, co-portfolio mananger of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, in a communication to VettaFi. Recent position changes in DBMF currently have the fund now short crude oil and long the yen and EAFE equities, with shorts on the remaining currencies it is invested in, as well as short Treasuries and commodities as of 11/17/22. | This means investors need strategies, like managed futures, that can go short when necessary," explained Andrew Beer, co-portfolio mananger of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, in a communication to VettaFi. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. Recent position changes in DBMF currently have the fund now short crude oil and long the yen and EAFE equities, with shorts on the remaining currencies it is invested in, as well as short Treasuries and commodities as of 11/17/22. | This means investors need strategies, like managed futures, that can go short when necessary," explained Andrew Beer, co-portfolio mananger of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, in a communication to VettaFi. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. Recent position changes in DBMF currently have the fund now short crude oil and long the yen and EAFE equities, with shorts on the remaining currencies it is invested in, as well as short Treasuries and commodities as of 11/17/22. | This means investors need strategies, like managed futures, that can go short when necessary," explained Andrew Beer, co-portfolio mananger of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments, in a communication to VettaFi. The iMGP DBi Managed Futures Strategy ETF (DBMF) has been a strong performer and immensely popular choice for advisors and investors alike in the challenging environment of 2022. Recent position changes in DBMF currently have the fund now short crude oil and long the yen and EAFE equities, with shorts on the remaining currencies it is invested in, as well as short Treasuries and commodities as of 11/17/22. | 0a63721e-7a8c-4f61-a9f5-a72487215405 |
708777.0 | 2022-11-16 00:00:00 UTC | 3 Economic Challenges and What Funds Could Solve For Them | DBMF | https://www.nasdaq.com/articles/3-economic-challenges-and-what-funds-could-solve-for-them | nan | nan | Financial advisors typically contend with numerous economic challenges. The upcoming Exchange conference kicking off February 5th through February 8th in Miami, Florida promises to deliver a host of informative keynotes, CE credit opportunities, and access to industry experts who can help solve the complex problems facing advisors today.
In the meantime, here are three broader market challenges facing advisors today along with ETFs that can help solve the problem.
Recession in the Air
With many experts and analysts pointing to a likely recession, portfolios that haven’t been prepared are likely to end up in a rough position. Amazon’s founder Jeff Bezos said to Markets Insider, "Things are slowing down, you're seeing layoffs in many, many sectors of the economy. The probabilities say if we're not in a recession right now, we're likely to be in one very soon."
Bezos advised small business owners to hold back on making big investments or purchases and instead keep a healthy amount of cash on hand. But even in a recession, investors have options beyond parking in cash.
Healthcare is one area where performance is less likely to be tethered to a recession. If people get sick, they need healthcare, which makes the Health Care Select Sector SPDR Fund (XLV) an interesting fund. Akin to healthcare, food is a necessity, which gives commodities funds such as the Teucrium Wheat Fund (WEAT) and the Teucrium Corn Fund (CORN) interesting possible plays.
The Energy Crisis
The ongoing Russian invasion of Ukraine continues to shake up the world, but one of its most viscerally felt impacts is in the realm of energy. The war has revealed the extent to which Russia had embedded itself in global energy supply chains, and with sanctions and geopolitical tensions at a high, an already brutal winter is likely to get even more challenging.
Energy has been one of the lone bright spots in a tumultuous 2023 market, and investors could get access to the sector in several ways, but one unique avenue to explore is the midstream through funds such as the Alerian MLP ETF (AMLP).
Another thing to keep in mind though is the long-term play toward clean energy. As COP27 looks to chart a path through climate change and the Democratic party shirked off a red wave during the midterms, clean energy could be on the cusp of getting massive investments. Investors can access the green energy revolution with funds like iShares Global Clean Energy ETF (ICLN) and the Invesco Solar ETF (TAN).
Inflation Consternation
Though the latest CPI print lead to a collective sigh of relief, if you were to somehow get yourself in a time machine and travel back even just a couple of years, people would look at you funny if you told them that, one day, hearing inflation was over 7% would bring them relief.
Inflation is a complex problem that is likely not going to be solved anytime soon. Fortunately, there are a number of potential plays that can help investors stay ahead of inflation. Commodities are a smart play in times of inflation so something like the Invesco DB Agricultural Fund (DBA) might be a reliable inflation pick. State Street’s SPDR SSGA Multi-Asset Real Return ETF (RLY) is specifically designed to combat inflation, and the surprise superstar performer of 2022, managed futures, also might be worth exploring through a fund like the iMGP DBi Managed Futures Strategy ETF (DBMF).
Exchange Ideas With Your Peers
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | State Street’s SPDR SSGA Multi-Asset Real Return ETF (RLY) is specifically designed to combat inflation, and the surprise superstar performer of 2022, managed futures, also might be worth exploring through a fund like the iMGP DBi Managed Futures Strategy ETF (DBMF). Bezos advised small business owners to hold back on making big investments or purchases and instead keep a healthy amount of cash on hand. The war has revealed the extent to which Russia had embedded itself in global energy supply chains, and with sanctions and geopolitical tensions at a high, an already brutal winter is likely to get even more challenging. | State Street’s SPDR SSGA Multi-Asset Real Return ETF (RLY) is specifically designed to combat inflation, and the surprise superstar performer of 2022, managed futures, also might be worth exploring through a fund like the iMGP DBi Managed Futures Strategy ETF (DBMF). The upcoming Exchange conference kicking off February 5th through February 8th in Miami, Florida promises to deliver a host of informative keynotes, CE credit opportunities, and access to industry experts who can help solve the complex problems facing advisors today. Akin to healthcare, food is a necessity, which gives commodities funds such as the Teucrium Wheat Fund (WEAT) and the Teucrium Corn Fund (CORN) interesting possible plays. | State Street’s SPDR SSGA Multi-Asset Real Return ETF (RLY) is specifically designed to combat inflation, and the surprise superstar performer of 2022, managed futures, also might be worth exploring through a fund like the iMGP DBi Managed Futures Strategy ETF (DBMF). Energy has been one of the lone bright spots in a tumultuous 2023 market, and investors could get access to the sector in several ways, but one unique avenue to explore is the midstream through funds such as the Alerian MLP ETF (AMLP). Investors can access the green energy revolution with funds like iShares Global Clean Energy ETF (ICLN) and the Invesco Solar ETF (TAN). | State Street’s SPDR SSGA Multi-Asset Real Return ETF (RLY) is specifically designed to combat inflation, and the surprise superstar performer of 2022, managed futures, also might be worth exploring through a fund like the iMGP DBi Managed Futures Strategy ETF (DBMF). But even in a recession, investors have options beyond parking in cash. Another thing to keep in mind though is the long-term play toward clean energy. | 2ae8177a-5351-472d-843f-45a8d47ed6c8 |
708778.0 | 2022-11-16 00:00:00 UTC | DBMF Crosses Critical Technical Indicator | DBMF | https://www.nasdaq.com/articles/dbmf-crosses-critical-technical-indicator | nan | nan | In trading on Wednesday, shares of the DBMF ETF (Symbol: DBMF) entered into oversold territory, changing hands as low as $31.54 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of DBMF, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 59.6. A bullish investor could look at DBMF's 29.9 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.58. DBMF shares are currently trading down about 0.8% on the day.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A bullish investor could look at DBMF's 29.9 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. In trading on Wednesday, shares of the DBMF ETF (Symbol: DBMF) entered into oversold territory, changing hands as low as $31.54 per share. In the case of DBMF, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 59.6. | In trading on Wednesday, shares of the DBMF ETF (Symbol: DBMF) entered into oversold territory, changing hands as low as $31.54 per share. In the case of DBMF, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 59.6. Looking at a chart of one year performance (below), DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.58. | In trading on Wednesday, shares of the DBMF ETF (Symbol: DBMF) entered into oversold territory, changing hands as low as $31.54 per share. In the case of DBMF, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 59.6. Looking at a chart of one year performance (below), DBMF's low point in its 52 week range is $25 per share, with $35.1365 as the 52 week high point — that compares with a last trade of $31.58. | In trading on Wednesday, shares of the DBMF ETF (Symbol: DBMF) entered into oversold territory, changing hands as low as $31.54 per share. In the case of DBMF, the RSI reading has hit 29.9 — by comparison, the RSI reading for the S&P 500 is currently 59.6. A bullish investor could look at DBMF's 29.9 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side. | 677c71af-b6fd-4fb1-aa47-cc2f5083512a |
708779.0 | 2022-11-11 00:00:00 UTC | Why Managed Futures ETFs Surged in 2022 | DBMF | https://www.nasdaq.com/articles/why-managed-futures-etfs-surged-in-2022 | nan | nan | 2022 has been a very challenging year for investors as most major asset classes are down significantly and there have been very few places to hide. One small area that has managed to shine is managed futures.
Managed futures ETFs offer these hedge fund strategies to individual investors in a low-cost, liquid wrapper. They seek to replicate the trades of market trend-following quant hedge funds.
The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. It is up more than 30% this year and has gathered over $1 billion in assets.
The KFA Mount Lucas Index Strategy ETF KMLM tracks an index of long and short managed futures contracts on 11 commodities, 6 currencies, and 5 global bond markets.
To learn more about these ETFs, please watch the short video above.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Managed futures ETFs offer these hedge fund strategies to individual investors in a low-cost, liquid wrapper. | iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. The KFA Mount Lucas Index Strategy ETF KMLM tracks an index of long and short managed futures contracts on 11 commodities, 6 currencies, and 5 global bond markets. | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports The KFA Mount Lucas Index Strategy ETF KMLM tracks an index of long and short managed futures contracts on 11 commodities, 6 currencies, and 5 global bond markets. | iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. Managed futures ETFs offer these hedge fund strategies to individual investors in a low-cost, liquid wrapper. | f64941f7-3e55-420e-9eca-b3ea9a35be42 |
708780.0 | 2022-11-10 00:00:00 UTC | Invest in the Trends of a Market on the Move With DBMF | DBMF | https://www.nasdaq.com/articles/invest-in-the-trends-of-a-market-on-the-move-with-dbmf | nan | nan | October’s CPI print of a 7.7% rise year-over-year was met with strong market upward momentum as the major equity indexes rallied on hopes of Fed easing in December. While it remains to be seen whether this rally will have legs, the rapid upswings and subsequent plummets have been an all-too-common occurrence in a year of prolonged volatility and bear markets, an environment where trend-following strategies like managed futures thrive.
Broad inflation was up 0.4% month-over-month while core inflation that removes food and energy and is one of the main inflationary gauges that the Fed looks at, was up 0.3% month-over-month and 6.3% year-over-year. The gains were the smallest amounts that inflation has increased since January of this year and have given rise to hopes that this slowing might prompt the Fed to only raise rates by 0.50% at December’s FOMC meeting.
Inflation has become increasingly entrenched over the year, spiking initially in goods but spreading out more broadly into services, a notoriously difficult area to slow inflationary momentum once it is established.
“A strong labor market and strong job growth supports strong demand, which allows inflationary pressures to stay elevated,” Blerina Uruci, U.S. economist at T. Rowe Price, told the WSJ. “You’ve got more demand chasing goods and services, the supply of which is being impaired at the moment for a number of reasons.”
The jobs market continues to remain resilient, one of the primary targets that the Fed is hoping to slow through its aggressive interest hiking regime. On top of that, the housing market and rental prices have already begun falling but because housing’s representation generally lags upwards of six months or more in CPI, that relief isn’t likely to be reflected anytime soon. Housing costs, measured through owners’ equivalent rent, account for two-fifths of core CPI.
DBMF Rides Trends, Regardless of Market Directionality
So what does it all mean for markets? Time will tell if markets can sustain their current upward trajectory and how the Fed will choose to close out the year regarding rates, but one thing remains certain: uncertainty, at least for the tail end of the year.
Trend-following strategies take the stress out of trying to anticipate market trajectories by only investing based on how stocks are currently moving, not where they might be headed. Managed futures invest based on what is trending and can thrive in volatile markets and uncertainty no matter which direction markets are moving, and few have done it as spectacularly this year as the iMGP DBi Managed Futures Strategy ETF (DBMF).
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 33.17% returns year-to-date as of 11/09/2022. It has over $1 billion in AUM and is the largest of any managed futures ETF.
DBMF allows for the diversification of portfolios across asset classes that are 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 position that the fund takes within domestically managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to determine how the largest commodity-trading advisor (CTA) hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining 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 a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF Rides Trends, Regardless of Market Directionality So what does it all mean for markets? Managed futures invest based on what is trending and can thrive in volatile markets and uncertainty no matter which direction markets are moving, and few have done it as spectacularly this year as the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. | Managed futures invest based on what is trending and can thrive in volatile markets and uncertainty no matter which direction markets are moving, and few have done it as spectacularly this year as the iMGP DBi Managed Futures Strategy ETF (DBMF). 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 Rides Trends, Regardless of Market Directionality So what does it all mean for markets? | Managed futures invest based on what is trending and can thrive in volatile markets and uncertainty no matter which direction markets are moving, and few have done it as spectacularly this year as the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF Rides Trends, Regardless of Market Directionality So what does it all mean for markets? DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. | Managed futures invest based on what is trending and can thrive in volatile markets and uncertainty no matter which direction markets are moving, and few have done it as spectacularly this year as the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF Rides Trends, Regardless of Market Directionality So what does it all mean for markets? DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. | 7da47a85-8c0f-4d0c-b70a-a5d89fdff086 |
708781.0 | 2022-11-10 00:00:00 UTC | Takeaways as Class of 2019 ETFs Hit 3-Year Mark | DBMF | https://www.nasdaq.com/articles/takeaways-as-class-of-2019-etfs-hit-3-year-mark | nan | nan | It may not feel like it, but it was just three years ago that the SEC adopted its new ETF rules, modernizing how the wrapper is regulated. The move had been a long time coming, taking the burgeoning ETF space to new heights. With ETFs launched that year hitting their crucial three-year milestones in 2022, investors should note some key takeaways from this crop of three-year mark ETFs.
AVANTIS ASCENDANT
Avantis Investors, part of American Century’s ETF arm, launched in 2019 with a suite of ETFs that have dominated their peers in flows. Three of the top five ETFs ranked by three-year flows are Avantis strategies; the Avantis U.S. Small Cap Value ETF (AVUV), the Avantis U.S. Equity ETF (AVUS), and the Avantis International Small Cap Value ETF (AVDV) take the first, third, and fifth positions, respectively.
Remarkably, all three Avantis ETFs are actively managed, with the JPMorgan BetaBuilders International Equity ETF (BBIN) being the lone passive strategy in the top five ETFs by three-year flows. In three-year returns, AVUV came second, returning 51%, only surpassed by the remarkable iPath Series B Carbon ETN (GRN), which returned 204% over three years.
AVUV, the largest gainer among passive and active ETFs launched in 2019, targets U.S. small-cap value stocks, using fundamental screens including outstanding shares, cash flow, and price-to-book value. All three of the Avantis ETFs lean towards value and smaller companies, privileging more defensive thinking. AVUV charges 25 basis points, seeing almost $4 billion in three-year flows.
ACTIVES STAKE THEIR CLAIM
Avantis’ suite of active ETFs weren’t the only active strategies to show passives how it’s done. Several other strategies focused on risk and volatility cracked the $1 billion mark for three-year inflows, underscoring how uncertain the last few years have been, from the pandemic to full-scale war returning to Europe.
The three ETFs, the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL), the RPAR Risk Parity ETF (RPAR), and the iMGP DBi Managed Futures Strategy ETF (DBMF) took $1.4 billion, $1.37 billion, and $1 billion in three-year flows, respectively. DBMF also stands out with the fourth-best returns over three years, returning 45.5% over that period.
Outside of the $1 billion tier, investors can find Innovator’s power buffer ETF suite adding to the trend of active investment strategies that protect investors from uncertainty while offering their various equity exposures. The Innovator U.S. Equity Power Buffer ETF – November (PNOV) took in $615 million over three years, returning 14.7% over the last three years, one of five Innovator strategies to take in more than $300 million since inception.
STICKY ICKY
Not all news was good news for three-year mark ETFs -- five different cannabis strategies launched in 2019, all of which have struggled to perform over three years. None of the cannabis strategies saw returns greater than -55% over three years, with the Global X Cannabis ETF (POTX) returning -85.5% over three years.
While POTX did take in $239 million over three years in net inflows, that was the highest amount among all five ETFs, passive and active. Investors may have initially felt drawn to the growing legal availability of cannabis in states throughout the U.S., but that has yet to bear significant fruit in cannabis-flavored three-year mark ETFs.
For more news, information, and strategy, visit the Core Strategies Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The three ETFs, the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL), the RPAR Risk Parity ETF (RPAR), and the iMGP DBi Managed Futures Strategy ETF (DBMF) took $1.4 billion, $1.37 billion, and $1 billion in three-year flows, respectively. DBMF also stands out with the fourth-best returns over three years, returning 45.5% over that period. AVUV, the largest gainer among passive and active ETFs launched in 2019, targets U.S. small-cap value stocks, using fundamental screens including outstanding shares, cash flow, and price-to-book value. | The three ETFs, the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL), the RPAR Risk Parity ETF (RPAR), and the iMGP DBi Managed Futures Strategy ETF (DBMF) took $1.4 billion, $1.37 billion, and $1 billion in three-year flows, respectively. DBMF also stands out with the fourth-best returns over three years, returning 45.5% over that period. Three of the top five ETFs ranked by three-year flows are Avantis strategies; the Avantis U.S. Small Cap Value ETF (AVUV), the Avantis U.S. Equity ETF (AVUS), and the Avantis International Small Cap Value ETF (AVDV) take the first, third, and fifth positions, respectively. | The three ETFs, the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL), the RPAR Risk Parity ETF (RPAR), and the iMGP DBi Managed Futures Strategy ETF (DBMF) took $1.4 billion, $1.37 billion, and $1 billion in three-year flows, respectively. DBMF also stands out with the fourth-best returns over three years, returning 45.5% over that period. Three of the top five ETFs ranked by three-year flows are Avantis strategies; the Avantis U.S. Small Cap Value ETF (AVUV), the Avantis U.S. Equity ETF (AVUS), and the Avantis International Small Cap Value ETF (AVDV) take the first, third, and fifth positions, respectively. | The three ETFs, the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL), the RPAR Risk Parity ETF (RPAR), and the iMGP DBi Managed Futures Strategy ETF (DBMF) took $1.4 billion, $1.37 billion, and $1 billion in three-year flows, respectively. DBMF also stands out with the fourth-best returns over three years, returning 45.5% over that period. Avantis’ suite of active ETFs weren’t the only active strategies to show passives how it’s done. | 2b335c00-9a95-4ed9-a615-ac590e542e1c |
708782.0 | 2022-11-08 00:00:00 UTC | Andrew Beer Talks Managed Futures Strategies on ETF Edge | DBMF | https://www.nasdaq.com/articles/andrew-beer-talks-managed-futures-strategies-on-etf-edge | nan | nan | It’s been a good year for some active managers, but none more so than those at the forefront of managed futures funds. Andrew Beer, co-portfolio manager of the highly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, recently appeared on ETF Edge alongside Andrew McOrmond, managing director of WallachBeth Capital, hosted by Bob Pisani, to talk managed futures and the ETF structure.
Beer opened the discussion by explaining that commodity trading advisor (CTA) — otherwise known as managed futures — hedge funds outperform during times of market changes and have been such strong performers this year because of the market regime shift that happened in 2022. The last two years, but this year, in particular, have focused on how to make money based on returning inflation and the trends that have arisen because of it.
Managed futures funds invest in the futures market, where they take long and short positions on a wide array of asset classes, depending on how those assets are moving; a big play for DBMF earlier this year was to be long crude oil when it was spiking.
“This is quite remarkable: 30% this year up. I’ve heard people say this could be the ETF of the year,” Pisani said.
The Index+ Approach to Managed Futures
DBMF seeks to replicate the performance of the average of the 20 largest CTA hedge funds, capturing their strategy within an ETF wrapper that is both widely available and easily investible for advisors and investors, as well as saving a fair amount on management fees. The fund currently is long crude oil but is short currencies, treasuries, commodities, and equities.
“We have been in crash protection mode, and that has been the right place to be,” Beer explained.
DBMF falls somewhere between passive and active as it seeks to emulate the performance of the 20 largest managed futures hedge funds, positioning its futures contracts based on the Dynamic Beta Engine, a proprietary, quantitative model. Beer describes the approach as “index plus” in that it seeks to replicate the performance of 20 differently managed CTA hedge funds (index) while cutting out the majority of the management fees (plus).
“We believe in the intelligence, the acumen, the sophistication of these [CTA managers] we just want to be able to copy what they do cheaply,” Beer said.
DBMF goes one step further, though, because taking the average performance eliminates the bias and potential risk of only investing in one CTA hedge fund manager’s perspective on the space, which has traditionally been a “curse” within the space.
“I think the big lesson of the past 15 years has been: the guy who did really well last year is just as likely to have a horrible year this year,” Andrew explained, speaking of the perils of hinging investments on a single manager’s strategy within managed futures hedge funds. Some managed futures hedge funds have had an extremely strong year of outperformance this year, while others have underperformed.
DBMF has a 34.26% YTD return as of 11/07/22 and a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Managed futures funds invest in the futures market, where they take long and short positions on a wide array of asset classes, depending on how those assets are moving; a big play for DBMF earlier this year was to be long crude oil when it was spiking. The Index+ Approach to Managed Futures DBMF seeks to replicate the performance of the average of the 20 largest CTA hedge funds, capturing their strategy within an ETF wrapper that is both widely available and easily investible for advisors and investors, as well as saving a fair amount on management fees. Andrew Beer, co-portfolio manager of the highly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, recently appeared on ETF Edge alongside Andrew McOrmond, managing director of WallachBeth Capital, hosted by Bob Pisani, to talk managed futures and the ETF structure. | Andrew Beer, co-portfolio manager of the highly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, recently appeared on ETF Edge alongside Andrew McOrmond, managing director of WallachBeth Capital, hosted by Bob Pisani, to talk managed futures and the ETF structure. The Index+ Approach to Managed Futures DBMF seeks to replicate the performance of the average of the 20 largest CTA hedge funds, capturing their strategy within an ETF wrapper that is both widely available and easily investible for advisors and investors, as well as saving a fair amount on management fees. DBMF falls somewhere between passive and active as it seeks to emulate the performance of the 20 largest managed futures hedge funds, positioning its futures contracts based on the Dynamic Beta Engine, a proprietary, quantitative model. | Andrew Beer, co-portfolio manager of the highly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, recently appeared on ETF Edge alongside Andrew McOrmond, managing director of WallachBeth Capital, hosted by Bob Pisani, to talk managed futures and the ETF structure. The Index+ Approach to Managed Futures DBMF seeks to replicate the performance of the average of the 20 largest CTA hedge funds, capturing their strategy within an ETF wrapper that is both widely available and easily investible for advisors and investors, as well as saving a fair amount on management fees. Managed futures funds invest in the futures market, where they take long and short positions on a wide array of asset classes, depending on how those assets are moving; a big play for DBMF earlier this year was to be long crude oil when it was spiking. | Andrew Beer, co-portfolio manager of the highly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, recently appeared on ETF Edge alongside Andrew McOrmond, managing director of WallachBeth Capital, hosted by Bob Pisani, to talk managed futures and the ETF structure. The Index+ Approach to Managed Futures DBMF seeks to replicate the performance of the average of the 20 largest CTA hedge funds, capturing their strategy within an ETF wrapper that is both widely available and easily investible for advisors and investors, as well as saving a fair amount on management fees. Managed futures funds invest in the futures market, where they take long and short positions on a wide array of asset classes, depending on how those assets are moving; a big play for DBMF earlier this year was to be long crude oil when it was spiking. | 901dc658-fed5-46d4-9082-18b266c95a1c |
708783.0 | 2022-11-04 00:00:00 UTC | It’s the Managed Futures Showdown of the Year: DBMF v KMLM | DBMF | https://www.nasdaq.com/articles/its-the-managed-futures-showdown-of-the-year%3A-dbmf-v-kmlm | nan | nan | Suppose you didn’t know about managed futures before this year. In that case, that’s almost assuredly been remedied in the volatility of 2022 when managed futures funds have outperformed virtually everything else by a sizable margin. In the most recent episode of ETF Battles, ETF Guide’s founder Ron DeLegge hosted a head-to-head of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) versus the iMGP Dbi Managed Futures Strategy ETF (DBMF), two top performing managed futures ETFs this year.
On to discuss how they thought each ETF stacked up in a range of categories was Dave Nadig, financial futurist at VettaFi, and Mike Akins, CEO of ETF Action. The way that ETF Battles are structured is that each guest must decide how they believe the ETFs featured stack up in various categories picked by the audience. This episode’s categories were cost, exposure strategy, performance, and a mystery category that each guest selected.
Cost
Both ETFs carry very similar management fees: DBMF has a total of 0.95% in fees compared to KMLM’s 0.92%, give or take.
“That’s expensive for any kind of strategy in an ETF wrapper, but given that this is a pretty niche strategy with some pretty complicated implementation underneath the hood, I don’t think those are aggressively overpriced, but they are both expensive,” Nadig explained.
Akins agreed on the premise that fees and differences between ETF management fees are critical in some areas of the ETF market but managed futures aren’t one of those areas. He voted DBMF the winner within the cost category because of its larger size and greater liquidity (DBMF has $1.1 billion in AUM versus KMLM’s $345 million).
Exposure Strategy
Akins explained that managed futures funds (which take long and short positions on a variety of asset classes through the futures market) aren’t the kind of funds that most advisors can just glance at the holdings and understand what is going on with the fund.
“It’s a lot more dust off your old due diligence process of understanding the process and understanding the managers, and I think that’s really key here,” Akins said.
Akins leaned towards DBMF of the winner in this category simply because of its active management and ability to be nimble in changing markets compared to KMLM’s passive one, although it is a strong contender with a diverse basket of assets that include 11 commodities, six currencies, and fiveglobal marketbonds.
Nadig agreed that active management makes DBMF more appealing in this space when markets roll, and there are sharp drops or dislocations.
“What you’re in today could literally be the opposite of what you’re in a month from now — that’s one of the attractions of managed futures is you’re going both long and short based on whatever signals the manager has here,” explained Nadig.
He went on to explain that though both funds are managed futures ones and may be similarly correlated because of that fact, they take very different approaches to how they’re investing in the futures market.
Performance
When it comes to performance, the clear winner this year is KMLM, which is up 42% YTD and 34-35% on a trailing 12-month basis compared to DBMF’s 33% YTD and 30% over the trailing 12-month basis, according to Nadig.
“Most of that change happened very recently, in the last 90 days or so, KMLM has just been on fire. It’s been in the right place at the right time: all of its longs have worked for it very well,” Nadig said.
KMLM comes out on top in terms of current performance in Akins’ book, but with the probability of the market cycle likely to change in the near future, he gives the winner to DBMF on a forward-looking basis.
Mystery Category
Akins went with portfolio construction as a choice for comparing the two funds and explained that managed futures are a strategic play over a tactical one purely on the basis that tactical traders can invest in the individual asset classes for much cheaper than within a managed futures vehicle. Managed futures are something worth committing to and staying in if you believe in them from an investment strategy perspective and not just committing partially or temporarily.
“Right now, those people that have had that allocation are reaping the benefits but a lot of people, and you can see it in the flows in this category, gave up on it in the 10-year bull run prior to what we’re seeing in this current market,” Akins said.
Nadig’s mystery category was concentration, and he was a fan of DBMF’s more concentrated positions (it only holds between 8-10 different futures contracts) compared to KMLM’s more broad mandate via its index, though KMLM has the benefit of being a more transparent fund because of its passive nature.
The overall winner was DBMF, but KMLM had many qualities about it that could make it a better fit for some portfolios, dependent on the advisor and investor’s perspective and needs. Overall, they’re both fantastic managed futures ETFs, and both have performed phenomenally this year with strong inflows.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Akins leaned towards DBMF of the winner in this category simply because of its active management and ability to be nimble in changing markets compared to KMLM’s passive one, although it is a strong contender with a diverse basket of assets that include 11 commodities, six currencies, and fiveglobal marketbonds. Nadig agreed that active management makes DBMF more appealing in this space when markets roll, and there are sharp drops or dislocations. KMLM comes out on top in terms of current performance in Akins’ book, but with the probability of the market cycle likely to change in the near future, he gives the winner to DBMF on a forward-looking basis. | In the most recent episode of ETF Battles, ETF Guide’s founder Ron DeLegge hosted a head-to-head of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) versus the iMGP Dbi Managed Futures Strategy ETF (DBMF), two top performing managed futures ETFs this year. Performance When it comes to performance, the clear winner this year is KMLM, which is up 42% YTD and 34-35% on a trailing 12-month basis compared to DBMF’s 33% YTD and 30% over the trailing 12-month basis, according to Nadig. Cost Both ETFs carry very similar management fees: DBMF has a total of 0.95% in fees compared to KMLM’s 0.92%, give or take. | In the most recent episode of ETF Battles, ETF Guide’s founder Ron DeLegge hosted a head-to-head of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) versus the iMGP Dbi Managed Futures Strategy ETF (DBMF), two top performing managed futures ETFs this year. Cost Both ETFs carry very similar management fees: DBMF has a total of 0.95% in fees compared to KMLM’s 0.92%, give or take. He voted DBMF the winner within the cost category because of its larger size and greater liquidity (DBMF has $1.1 billion in AUM versus KMLM’s $345 million). | In the most recent episode of ETF Battles, ETF Guide’s founder Ron DeLegge hosted a head-to-head of the KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM) versus the iMGP Dbi Managed Futures Strategy ETF (DBMF), two top performing managed futures ETFs this year. KMLM comes out on top in terms of current performance in Akins’ book, but with the probability of the market cycle likely to change in the near future, he gives the winner to DBMF on a forward-looking basis. Cost Both ETFs carry very similar management fees: DBMF has a total of 0.95% in fees compared to KMLM’s 0.92%, give or take. | af8cfdd5-1b17-45b3-88c9-4fd23db199af |
708784.0 | 2022-11-03 00:00:00 UTC | How This Trend-Following ETF Surged Over 30% YTD | DBMF | https://www.nasdaq.com/articles/how-this-trend-following-etf-surged-over-30-ytd | nan | nan | (1:00) - Where To Find Strong and Cheap Stocks
(5:15) - Stock Screener: Tracey’s Top Stock Picks
(28:30) - Episode Roundup: BG, ADM, ETD, NEX, JKS
Podcast@Zacks.com
In this episode of ETF Spotlight, I speak with Andrew Beer, Managing Member at Dynamic Beta investments, about hedge fund replication ETFs that have significantly outperformed the broader indexes this year.
Dynamic Beta and iM Global Partners offer several hedge fund strategies in cost-effective and transparent vehicles. They aim to replicate the core exposures of leading hedge funds with highly liquid instruments.
Andrew, who has worked with value investing legend Seth Klarman, believes while the hedge fund industry still generates a lot of alpha, it is consumed by the fee structure. He aims to bring Jack Bogle’s investment philosophy to hedge funds.
The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. It is up more than 30% this year and has gathered over $1 billion in assets.
The IMGP DBi Hedge Strategy ETF DBEH seeks to match or exceed the performance of a portfolio of forty leading equity long/short hedge funds using a factor replication strategy. The fund employs long and short positions in derivatives across major asset classes.
We discuss how these products work and whether there is a role for these complicated strategies within a portfolio.
Tune in to the podcast to learn more.
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iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Dynamic Beta and iM Global Partners offer several hedge fund strategies in cost-effective and transparent vehicles. | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports iMGP DBi Hedge Strategy ETF (DBEH): ETF Research Reports | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports (1:00) - Where To Find Strong and Cheap Stocks (5:15) - Stock Screener: Tracey’s Top Stock Picks (28:30) - Episode Roundup: BG, ADM, ETD, NEX, JKS Podcast@Zacks.com In this episode of ETF Spotlight, I speak with Andrew Beer, Managing Member at Dynamic Beta investments, about hedge fund replication ETFs that have significantly outperformed the broader indexes this year. | The iMGP DBi Managed Futures Strategy ETF DBMF takes long and short positions in derivatives, primarily futures contracts and forward contracts, across equities, fixed income, currencies, and commodities. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports The IMGP DBi Hedge Strategy ETF DBEH seeks to match or exceed the performance of a portfolio of forty leading equity long/short hedge funds using a factor replication strategy. | c59db088-3654-44e3-996c-411d376e47ca |
708785.0 | 2022-10-31 00:00:00 UTC | Move Over Real Estate: Why Managed Futures Are the New Portfolio Diversifier | DBMF | https://www.nasdaq.com/articles/move-over-real-estate%3A-why-managed-futures-are-the-new-portfolio-diversifier | nan | nan | Real estate has had a historical role as a 3%–5% diversifier within equity and bond portfolios, but in the changing and challenged markets of 2022, real estate investment trusts (REITs) and the real estate sector broadly have proven to be fairly correlated to equities. Given both the outperformance of managed futures, a trend-following strategy that invests in the futures market, and the lack of correlation of futures to equities and bonds, the case could be made that managed futures now occupy that 5% diversifier sleeve within portfolios.
Advisors and investors have long used REITs — publicly traded companies that finance, own, or operate properties that produce income — and the real estate sector as a means to seek income and dividends, but also as diversification sleeves in their portfolios because of their historically low correlation to both equities and bonds. This role of REITs as portfolio diversifiers (and even as an individual asset class) has been questioned increasingly in recent years, and by looking at real estate’s performance this year, it has become clear that REITs are neither an optimal nor an effective diversifier in the changing market regime of 2022.
Real estate has historically been lumped into financials within indexes, but that changed in 2016 when the S&P 500 broke real estate out into its own sector. That sector now accounts for about 3% of the S&P 500, and in the changing market regime of 2022, that sector is moving analogously to the broader index.
For advisors and investors who are accustomed to slotting real estate into the diversification sleeves of their portfolios as an alternative to equities, it’s proved to be, well, a bit disappointing this year. The Vanguard Real Estate ETF (VNQ) has moved almost in lockstep with the S&P 500 this year — captured via the SPDR S&P 500 ETF Trust (SPY) in the above graph. The sector-specific Real Estate Select Sector SPDR Fund (XLRE) has performed slightly better but generally has trended very similarly to the S&P.
REITs Lean Into Innovation
The current correlation between REITs, equities, and bonds could be part of the larger trend that has seen many of the major asset classes challenged this year, with REITs feeling the heat of rising interest rates similarly to bonds but with increasing equity exposures.
One look at the U.S. real estate market right now reveals the carnage already happening for individual homebuyers as mortgage rates climb. Pending home sales in September were at their lowest rates since June 2010 (excluding the April 2020 COVID-19 crash), down 31% year-over-year. Rising mortgage rates for individuals and businesses will continue to take their toll across the real estate industry in the coming months and potentially beyond as the Fed looks to raise rates and sustain them long enough to bring inflation down close to the 2% target.
Looking beyond what’s happening in the individual homeownership market, REIT companies are increasingly pushing into the areas of the new digital economy such as e-commerce, science, and technology that could be creating greater exposure and linkage to the performance of those sectors.
"REIT ETFs have increasing exposure to growth and innovation-oriented businesses tied to communications and data centers. It’s this increased exposure to innovation that could be the beginnings of greater correlations between the real estate sector and technology and other growth-centric sectors over time, though that remains to be seen,” hypothesized Todd Rosenbluth, head of research at VettaFi.
It's this kind of exposure that has institutional investors increasingly turning to REITs as a means to gain access to these budding property sectors, John Worth, Nariet executive vice president of research and investor outreach, told Pensions and Investments. At the end of the day, that still leaves the fact that REITs remain increasingly correlated to equities, despite their income and dividend potentials.
The Case for Managed Futures
Alternatives have become an increasingly popular investment in 2022 when equities, bonds, and just about every other traditional allocation has floundered. One of the strongest-performing alternatives this year has been managed futures that invest in the futures market and take long and short positions on a variety of asset classes.
“Once upon a time, it was ‘stocks, bonds, and real estate.’ That worked beautifully when interest rates marched inexorably lower; not so much today," Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, the subadvisor for the fund, told VettaFi. “In 2023, you’ll start hearing a lot more about ‘stocks, bonds, and managed futures."
Managed futures have been dubbed the crisis alpha generators, performing their strongest in times of market stress and dislocation, but their ability to perform isn’t limited only to times of volatility and market stress. Because of their non-correlation to equities and bonds, they present portfolio diversification opportunities in any market, with a return stream that is agnostic to which way markets are moving.
“Managed futures hit the trifecta: strong gains during the dotcom, GFC, and Powell bear markets. Not true for real estate — let alone commodities, hedge funds, or the myriad of other diversifiers out there," Beer said. “Real estate was a great hedge until valuations rose to nosebleed levels as yield-hungry investors bid up prices. A lesson in the importance of picking your entry point.”
There are several managed futures ETFs on the market, but the most popular and largest by far is the iMGP DBi Managed Futures Strategy ETF (DBMF) with over $1 billion in AUM and a five-star rating from Morningstar. DBMF is an actively managed fund that uses long and short positions within futures across domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
It utilizes its own proprietary, quantitative model to determine the allocations of the average of the 20 largest managed futures hedge funds but seeks to replicate their performance, not their positions. By taking the average of the hedge funds, it eliminates single manager bias and risk while providing access to a strategy previously only available to institutional investors.
DBMF has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | DBMF is an actively managed fund that uses long and short positions within futures across domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary). “Once upon a time, it was ‘stocks, bonds, and real estate.’ That worked beautifully when interest rates marched inexorably lower; not so much today," Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, the subadvisor for the fund, told VettaFi. A lesson in the importance of picking your entry point.” There are several managed futures ETFs on the market, but the most popular and largest by far is the iMGP DBi Managed Futures Strategy ETF (DBMF) with over $1 billion in AUM and a five-star rating from Morningstar. | “Once upon a time, it was ‘stocks, bonds, and real estate.’ That worked beautifully when interest rates marched inexorably lower; not so much today," Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, the subadvisor for the fund, told VettaFi. A lesson in the importance of picking your entry point.” There are several managed futures ETFs on the market, but the most popular and largest by far is the iMGP DBi Managed Futures Strategy ETF (DBMF) with over $1 billion in AUM and a five-star rating from Morningstar. DBMF is an actively managed fund that uses long and short positions within futures across domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary). | “Once upon a time, it was ‘stocks, bonds, and real estate.’ That worked beautifully when interest rates marched inexorably lower; not so much today," Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, the subadvisor for the fund, told VettaFi. A lesson in the importance of picking your entry point.” There are several managed futures ETFs on the market, but the most popular and largest by far is the iMGP DBi Managed Futures Strategy ETF (DBMF) with over $1 billion in AUM and a five-star rating from Morningstar. DBMF is an actively managed fund that uses long and short positions within futures across domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary). | “Once upon a time, it was ‘stocks, bonds, and real estate.’ That worked beautifully when interest rates marched inexorably lower; not so much today," Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments, the subadvisor for the fund, told VettaFi. A lesson in the importance of picking your entry point.” There are several managed futures ETFs on the market, but the most popular and largest by far is the iMGP DBi Managed Futures Strategy ETF (DBMF) with over $1 billion in AUM and a five-star rating from Morningstar. DBMF is an actively managed fund that uses long and short positions within futures across domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary). | ab2f0a87-5543-4730-8389-37ec2fc4160a |
708786.0 | 2022-10-24 00:00:00 UTC | Andrew Beer Talks Trend Following and DBMF With CTA Manager | DBMF | https://www.nasdaq.com/articles/andrew-beer-talks-trend-following-and-dbmf-with-cta-manager | nan | nan | Trend following is having a rip-roaring year this year, capitalizing on continued volatility and uncertainty in markets. Andrew Beer, co-portfolio manager of the wildly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments was a recent guest on the “Top Traders Unplugged: Systematic Investor” podcast hosted by Niels Kaastrup-Larsen, a long-time member of the hedge fund industry and currently head of Asian and European activities at Dunn Capital.
The discussion opened with a talk about what’s happening in the hedge fund space and Beer’s background in the hedge fund industry before he moved from hedge funds to ETFs. Managed futures that take long and short positions on a variety of asset classes via the futures market have been strong performers this year as well as portfolio diversifiers and have been enormously popular.
DBMF is a fund that seeks to replicate the performance of the top 20 managed futures hedge funds averaged together, providing the savings in management fees that an ETF provides while capturing the performance and diversification potentials of the managed futures strategy.
“My belief in hedge funds is it’s always the big trades,” Beer said. “If you had to sum up managed futures this year, I’d say they got inflation right, and you can break that down into a series of trades and times.”
DBMF Captures Quant Strategies in an ETF
The strategy that DBMF employs requires quantitative analysis of hundreds of models to determine robustness as well as find the largest positions and the biggest trades and capture them, replicating the performance of the largest managed futures hedge funds. DBMF only takes positions on 10 different assets: two-year, 10-year, and 30-year treasuries; gold and oil; the S&P 500, EAFE (Europe, Australasia, and the Far East), emerging markets; and the Japanese yen as well as the euro.
Kaastrup-Larsen went on to discuss the trap that can happen between obtaining correlation and actual returns, and that a strategy that obtains perfect correlation doesn’t always equate to positive returns.
“Our strategies have always been about trying to get the big trades as right as we can and avoid getting fooled by the data,” Beer said. “Our job as humans who are overseeing models is trying to design them in a way where we don’t have those periods where the index, or the target, or whatever goes up 10 and we’re down 10 and we’re explaining it to people.”
Eliminating Single Manager Risk and RIA Enthusiasm
The two went on to talk about the difficult environment for managed futures over the last couple of decades and the strong outperformance of equities and bonds and the potential pitfalls of investing in just one managed future manager. DBMF eliminates single manager risk by seeking to replicate the performance of the average of the largest 20 managed futures hedge funds and is what Beer terms a “beta plus” strategy for the managed futures space: the plus comes from the savings in fees by using the strategy via an ETF.
Beer fielded several questions in the Q&A portion of the podcast, including about the distribution of investor types in the fund.
“We have an army of small RIAs that bought into this product. The incredible thing is we’ve gone from $60 million to — we’re closing in on $1.1 billion as of yesterday [recorded October 16],” Beer explained. “We are not on Morgan Stanley, Merrill Lynch, UBS; no institutional consultants have approved us; we are not in any Vanguard models, iShares models. It has been entirely an army of independent, entrepreneurial RIAs who love the space and either have portfolios that only invest in ETFs, so they can’t select from it, or they want to make it a big part of their asset allocation models and they want index-like.”
DBMF has 35.00% returns year-to-date as of 10/24/2022. It is a five-star rated fund with Morningstar and is the largest of the managed futures ETFs.
DBMF has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “If you had to sum up managed futures this year, I’d say they got inflation right, and you can break that down into a series of trades and times.” DBMF Captures Quant Strategies in an ETF The strategy that DBMF employs requires quantitative analysis of hundreds of models to determine robustness as well as find the largest positions and the biggest trades and capture them, replicating the performance of the largest managed futures hedge funds. DBMF only takes positions on 10 different assets: two-year, 10-year, and 30-year treasuries; gold and oil; the S&P 500, EAFE (Europe, Australasia, and the Far East), emerging markets; and the Japanese yen as well as the euro. It has been entirely an army of independent, entrepreneurial RIAs who love the space and either have portfolios that only invest in ETFs, so they can’t select from it, or they want to make it a big part of their asset allocation models and they want index-like.” DBMF has 35.00% returns year-to-date as of 10/24/2022. | Andrew Beer, co-portfolio manager of the wildly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments was a recent guest on the “Top Traders Unplugged: Systematic Investor” podcast hosted by Niels Kaastrup-Larsen, a long-time member of the hedge fund industry and currently head of Asian and European activities at Dunn Capital. DBMF is a fund that seeks to replicate the performance of the top 20 managed futures hedge funds averaged together, providing the savings in management fees that an ETF provides while capturing the performance and diversification potentials of the managed futures strategy. DBMF eliminates single manager risk by seeking to replicate the performance of the average of the largest 20 managed futures hedge funds and is what Beer terms a “beta plus” strategy for the managed futures space: the plus comes from the savings in fees by using the strategy via an ETF. | DBMF is a fund that seeks to replicate the performance of the top 20 managed futures hedge funds averaged together, providing the savings in management fees that an ETF provides while capturing the performance and diversification potentials of the managed futures strategy. “If you had to sum up managed futures this year, I’d say they got inflation right, and you can break that down into a series of trades and times.” DBMF Captures Quant Strategies in an ETF The strategy that DBMF employs requires quantitative analysis of hundreds of models to determine robustness as well as find the largest positions and the biggest trades and capture them, replicating the performance of the largest managed futures hedge funds. DBMF eliminates single manager risk by seeking to replicate the performance of the average of the largest 20 managed futures hedge funds and is what Beer terms a “beta plus” strategy for the managed futures space: the plus comes from the savings in fees by using the strategy via an ETF. | DBMF is a fund that seeks to replicate the performance of the top 20 managed futures hedge funds averaged together, providing the savings in management fees that an ETF provides while capturing the performance and diversification potentials of the managed futures strategy. DBMF eliminates single manager risk by seeking to replicate the performance of the average of the largest 20 managed futures hedge funds and is what Beer terms a “beta plus” strategy for the managed futures space: the plus comes from the savings in fees by using the strategy via an ETF. Andrew Beer, co-portfolio manager of the wildly popular iMGP DBi Managed Futures Strategy ETF (DBMF), and managing member of Dynamic Beta investments was a recent guest on the “Top Traders Unplugged: Systematic Investor” podcast hosted by Niels Kaastrup-Larsen, a long-time member of the hedge fund industry and currently head of Asian and European activities at Dunn Capital. | 352ae57a-e2f1-4f8e-a2e9-a8edf6685f48 |
708787.0 | 2022-10-19 00:00:00 UTC | 4 Strategies to Survive and Thrive Amid Chaotic Markets | DBMF | https://www.nasdaq.com/articles/4-strategies-to-survive-and-thrive-amid-chaotic-markets | nan | nan | The world can be an awful lot right now. Between contentious midterm elections, a Fed determined to raise rates and increase unemployment despite other options for dealing with inflation, and the increasing likelihood of a recession, advisors are found in want of effective solutions for navigating these trying markets.
Fortunately, there are some interesting options worthy of exploration. Here are a few things you can look into to help your clients' portfolios survive and thrive despite the bleak economic outlook.
Managing the Uncertain Future Through Managed Futures
The surprise superstar of performance this year is managed futures, such as the iMGP DBi Managed Futures Strategy ETF (DBMF). In a recent ETF 360, Dynamic Beta Investment's Andrew Beer said, "What got us interested in this space is called 'crisis alpha.'" Managed futures perform historically well during trying times, and this year has been no exception. While the S&P cratered 22% YTD, managed futures are up over 20%.
According to Beer, "what we say about managed futures is that it has more diversification bang for the buck than just about any other strategy you could find." Beer describes DBMF as a "hedge fund replication strategy" and believes that managed futures should be in everybody's portfolio.
When the Going Gets Tough, the Tough Get Buffered
Another strategy worth looking at is defined outcomes. Innovator has a unique suite of these buffered products, which provide downside protection to help investors mitigate potential losses when they arise while still being able to tap into the upside. Buffered funds have seen a whopping $6 billion in inflows this year.
While buffered products do tend to have higher fees, according to NCDR Inc. chief investment officer Roni Israelov, "These strategies are built to have less risk than the stock market."
The NightShares are the Right Shares
Three of the most compelling funds on the market are the NightShares 500 1x/1.5x ETF (NYSE Arca: NSPL), the NightShares 500 ETF (NYSE Arca: NSPY), and the NightShares 2000 ETF (NYSE Arca: NIWM). These funds attempt to capture "the night effect," the tendency of overnight markets to outperform the daytime trading session on a risk-adjusted basis.
Finding the Right Venue to Exchange Ideas
Finally, advisors can unearth more unique ideas and strategies at the fast-approaching ETF conference, Exchange: An ETF Experience.
After a splashy debut last year, Exchange is returning February 5th through February 8th and promises to provide advisors with an opportunity to see experts and thought leaders speak on the pressing issues of the moment and dig into unique solutions for times unlike any that have come before. Exchange will also offer advisors a platform to connect and grow their networks. Registration can be made here.
For more news, information, and strategy, visit VettaFi.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Managing the Uncertain Future Through Managed Futures The surprise superstar of performance this year is managed futures, such as the iMGP DBi Managed Futures Strategy ETF (DBMF). Beer describes DBMF as a "hedge fund replication strategy" and believes that managed futures should be in everybody's portfolio. Innovator has a unique suite of these buffered products, which provide downside protection to help investors mitigate potential losses when they arise while still being able to tap into the upside. | Managing the Uncertain Future Through Managed Futures The surprise superstar of performance this year is managed futures, such as the iMGP DBi Managed Futures Strategy ETF (DBMF). Beer describes DBMF as a "hedge fund replication strategy" and believes that managed futures should be in everybody's portfolio. The NightShares are the Right Shares Three of the most compelling funds on the market are the NightShares 500 1x/1.5x ETF (NYSE Arca: NSPL), the NightShares 500 ETF (NYSE Arca: NSPY), and the NightShares 2000 ETF (NYSE Arca: NIWM). | Managing the Uncertain Future Through Managed Futures The surprise superstar of performance this year is managed futures, such as the iMGP DBi Managed Futures Strategy ETF (DBMF). Beer describes DBMF as a "hedge fund replication strategy" and believes that managed futures should be in everybody's portfolio. The NightShares are the Right Shares Three of the most compelling funds on the market are the NightShares 500 1x/1.5x ETF (NYSE Arca: NSPL), the NightShares 500 ETF (NYSE Arca: NSPY), and the NightShares 2000 ETF (NYSE Arca: NIWM). | Managing the Uncertain Future Through Managed Futures The surprise superstar of performance this year is managed futures, such as the iMGP DBi Managed Futures Strategy ETF (DBMF). Beer describes DBMF as a "hedge fund replication strategy" and believes that managed futures should be in everybody's portfolio. Managed futures perform historically well during trying times, and this year has been no exception. | c9609b0e-2e4e-4450-a991-620fa7949c44 |
708788.0 | 2022-10-17 00:00:00 UTC | Managed Futures as a Strategy Massively Outperforms in 2022 | DBMF | https://www.nasdaq.com/articles/managed-futures-as-a-strategy-massively-outperforms-in-2022 | nan | nan | It’s the year for trend-following strategies, with managed futures outperforming in hedge funds, mutual funds, and exchange traded funds when broad equities and bonds have suffered.
The managed futures strategy is a quantitatively driven approach to investing that tracks and invests in how assets are actually moving and trending. Managed futures funds take long and short positions on a variety of asset classes (commodities, equities, fixed income, and currencies) based on data analysis of how those assets are trending, not based on what investors believe future performance will be.
It’s a strategy that generally performs strongly during times of market regime change and dislocation and to say they have performed strongly this year would be a vast understatement.
“What stands out this year is that there have been good trends in multiple asset classes,” Yao Hua Ooi, portfolio manager of the AQR Managed Futures mutual fund, told Barron’s. “The upward surprises in inflation and the monetary-policy responses have led to the most dramatic rise in yields across most developed markets since the 1980s.”
Managed futures got their start in hedge funds, which have performed strongly this year. The SG CTA Index that tracks the major commodity trading advisors (CTA) open to new investments is up 28.24% year-to-date as of 10/17/2022 according to BarclayHedge. For comparison, a year ago the index was up 10.37% YTD and two years ago it was down 2.02%. The SG Trend Index, a subset of the SG CTA Index that tracks traders of trend-following strategies, was up 37.62% YTD as of 10/17/2022 according to BarclayHedge.
Access to hedge funds remains limited, however, typically reserved for institutional investors, barring many investors from gaining exposure to the hedge fund's outperformance, and hedge funds come with steep management fees — 2% manager fees in addition to a 20% performance fee when the fund does well.
Several managed futures mutual funds are demonstrating even greater outperformance on an individual basis: the AlphaSimplex Managed Futures Strategy fund (ASFYX) was up 47.7% as of 10/17/22, and the AQR Managed Futures Strategy (AQMNX) is up 40.7% YTD. Most managed futures mutual funds are up at least 20% YTD but can be equally prohibitive to invest in, often with $1 million minimum investments and time commitments.
Capturing Hedge Fund Managed Futures Performance in an ETF
Managed futures take positions on equities and fixed income but they remain negatively correlated to both because they invest in the futures market. They have been a strong diversification play for portfolios this year and ETFs that utilize the strategy have been enormously popular. One such ETF is the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures ETF with $1 billion in AUM designed to capture performance no matter how equity markets are moving.
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 36.60% returns year-to-date as of 10/04/2022. It is a five-star rated fund with Morningstar and is the largest of the managed futures ETFs.
DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. It is an actively managed fund that uses long and short positions within domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestic managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | One such ETF is the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures ETF with $1 billion in AUM designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | One such ETF is the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures ETF with $1 billion in AUM designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | One such ETF is the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures ETF with $1 billion in AUM designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | One such ETF is the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures ETF with $1 billion in AUM designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | 1659a0a4-e70c-4950-ad6b-138270fe8d15 |
708789.0 | 2022-10-17 00:00:00 UTC | Noteworthy ETF Inflows: DBMF | DBMF | https://www.nasdaq.com/articles/noteworthy-etf-inflows%3A-dbmf | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $86.4 million dollar inflow -- that's a 9.1% increase week over week in outstanding units (from 27,500,000 to 30,000,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average:
Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.89 as the 52 week high point — that compares with a last trade of $34.13. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.89 as the 52 week high point — that compares with a last trade of $34.13. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $86.4 million dollar inflow -- that's a 9.1% increase week over week in outstanding units (from 27,500,000 to 30,000,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.89 as the 52 week high point — that compares with a last trade of $34.13. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $86.4 million dollar inflow -- that's a 9.1% increase week over week in outstanding units (from 27,500,000 to 30,000,000). Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $86.4 million dollar inflow -- that's a 9.1% increase week over week in outstanding units (from 27,500,000 to 30,000,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.89 as the 52 week high point — that compares with a last trade of $34.13. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $86.4 million dollar inflow -- that's a 9.1% increase week over week in outstanding units (from 27,500,000 to 30,000,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.89 as the 52 week high point — that compares with a last trade of $34.13. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | 32235e22-79b3-4f9a-87e0-61e12eb5e249 |
708790.0 | 2022-10-12 00:00:00 UTC | DBMF Hits $1 Billion: “Managed Futures Have Gone from Optional to Essential” | DBMF | https://www.nasdaq.com/articles/dbmf-hits-%241-billion%3A-managed-futures-have-gone-from-optional-to-essential | nan | nan | Managed futures, the strategy long harangued as underperforming in an environment that punished much beyond vanilla, passive strategies for over a decade, has hit its stride this year, and none more so than with the iMGP DBi Managed Futures Strategy ETF (DBMF) that has just crossed the $1 billion mark in AUM as of 11 October, 2022.
Managed futures are essentially the ultimate trend-following strategy: it's a quant driven strategy that analyzes how assets are actually moving instead of relying on how advisors and investors believe they will move. They typically perform exceedingly well during times of market regime shifts and dislocations because they invest based on the trends whereas sentiment, habit, or hopefulness can sometimes keep investors in positions longer than what is profitable.
"When the world went from QE infinity to the deflation of Bubble Maximus, managed futures funds turned their portfolios accordingly and never looked back. In a world like today, dispassionate quant models have a huge competitive advantage over us, humans," explained Andrew Beer to VettaFi. Beer is the co-portfolio manager of DBMF and a managing member of Dynamic Beta investments, the sub-advisor of the fund.
Managed futures got their start as a hedge fund strategy and have offered significant returns this year but gaining access to hedge funds can be a herculean task for the everyday investor, with high entry fees and equally high manager and performance-based fees.
"We are incredibly grateful for the support of the early adopters: independent RIAs who saw the diversification benefits of managed futures, but struggled with how access the strategy without taking on too much single manager risk," Beer said.
DBMF brings the hedge fund strategy to the ETF wrapper and does so cleverly, offering up the averaged performance of the top 20 managed futures hedge funds within an ETF with management fees of just 0.95%. Collating the average performance eliminates single manager bias risk, and the cost savings of going through an ETF means that advisors and investors can capture and retain more of the alpha that the strategy generates compared to those going through a hedge fund with 2% manager fees and a 20% performance fee.
The fund is the only 5-Star Morningstar rated managed futures ETF and is the fastest growing ETF this year of all ETFs that started the year with $50 million or more (DBMF began with $61 million), with an AUM growth rate of 1,389% as of 05 October 2022 according to a tweet from Athanasios Psarofagis, ETF analyst for Bloomberg Intelligence.
Current year-to-date returns for DBMF are 34.56% as of 10/11/22.
"DBMF hitting the $1 billion mark is a key milestone that proves that advisors and end clients are gaining comfort in managed futures through an ETF. The fund provides an alternative to traditional stocks and bonds for a modest fee," said Todd Rosenbluth, head of research at VettaFi.
Managed Futures Offer Benefits Long-Term
Managed futures aren't just for times of volatility but are designed to perform no matter which direction the markets are moving: the strategy takes positions, both long and short, on a range of asset classes through the futures market based on how those assets are trending and invests across currencies, commodities, bonds, and equities. Because managed futures transact within the futures market, they are non-correlated to both stocks and bonds, offering a strong diversification opportunity for portfolios in any market.
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. The fund made big money by taking long positions on crude oil earlier in the year and has been short currencies in a strengthening dollar regime that is wreaking havoc for many countries. It relies on the Dynamic Beta Engine, a proprietary quantitative model that seeks to determine the positions of the largest commodity-trading advisor hedge funds and then mimics their performance (not their positions).
While managed futures struggled in the previous environment of the last decade, higher interest rates and a higher rate environment that is expected over the coming years will provide greater opportunity for long-term performance.
"After this year, managed futures have gone from optional to essential for anyone building a diversified, multi-asset portfolio," Beer said of the strategy.
"Our job is to find a way to make this strategy more accessible to more allocators. We hope DBMF will invite more and more allocators into the tent," said Beer. $1 billion in AUM says that Dynamic Beta investments and iM Global Partners are well on their way.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | "DBMF hitting the $1 billion mark is a key milestone that proves that advisors and end clients are gaining comfort in managed futures through an ETF. Managed futures, the strategy long harangued as underperforming in an environment that punished much beyond vanilla, passive strategies for over a decade, has hit its stride this year, and none more so than with the iMGP DBi Managed Futures Strategy ETF (DBMF) that has just crossed the $1 billion mark in AUM as of 11 October, 2022. Beer is the co-portfolio manager of DBMF and a managing member of Dynamic Beta investments, the sub-advisor of the fund. | Managed futures, the strategy long harangued as underperforming in an environment that punished much beyond vanilla, passive strategies for over a decade, has hit its stride this year, and none more so than with the iMGP DBi Managed Futures Strategy ETF (DBMF) that has just crossed the $1 billion mark in AUM as of 11 October, 2022. Beer is the co-portfolio manager of DBMF and a managing member of Dynamic Beta investments, the sub-advisor of the fund. DBMF brings the hedge fund strategy to the ETF wrapper and does so cleverly, offering up the averaged performance of the top 20 managed futures hedge funds within an ETF with management fees of just 0.95%. | Managed futures, the strategy long harangued as underperforming in an environment that punished much beyond vanilla, passive strategies for over a decade, has hit its stride this year, and none more so than with the iMGP DBi Managed Futures Strategy ETF (DBMF) that has just crossed the $1 billion mark in AUM as of 11 October, 2022. DBMF brings the hedge fund strategy to the ETF wrapper and does so cleverly, offering up the averaged performance of the top 20 managed futures hedge funds within an ETF with management fees of just 0.95%. Beer is the co-portfolio manager of DBMF and a managing member of Dynamic Beta investments, the sub-advisor of the fund. | Managed futures, the strategy long harangued as underperforming in an environment that punished much beyond vanilla, passive strategies for over a decade, has hit its stride this year, and none more so than with the iMGP DBi Managed Futures Strategy ETF (DBMF) that has just crossed the $1 billion mark in AUM as of 11 October, 2022. DBMF brings the hedge fund strategy to the ETF wrapper and does so cleverly, offering up the averaged performance of the top 20 managed futures hedge funds within an ETF with management fees of just 0.95%. Beer is the co-portfolio manager of DBMF and a managing member of Dynamic Beta investments, the sub-advisor of the fund. | b3a49021-619f-4e1e-a946-5b21dadfcd7d |
708791.0 | 2022-10-10 00:00:00 UTC | Dave Nadig Appears on ETF IQ to Explore Where the Money Goes in Troubled Times | DBMF | https://www.nasdaq.com/articles/dave-nadig-appears-on-etf-iq-to-explore-where-the-money-goes-in-troubled-times | nan | nan | VettaFi Financial Futurist Dave Nadig appeared on Bloomberg’s ETF IQ to discuss the troubled markets, where flows are going, ESG, and more.
Even during challenging markets, money is always moving somewhere. “This time, what we’ve seen is a lot of money flowing into safety plays,” Nadig said. ETFs continue to see big inflows in defiance of the precarious general market environment. According to Nadig, even last month, fifteen billion when into equities and bonds.
“In the equity market, what we see is a lot of rotation in the last quarter to safety plays. We saw a big move toward dividend strategies – really as a proxy for quality, that seems to have pulled back, and we’ve seen the research pull back on that as well,” Nadig said, noting funds like the iShares MSCI USA Min Vol Factor ETF (USMV) have started catching on as investors seek answers to broader market volatility.
Bond ETFs are also starting to get some flows, Balchunas observed, saying to Nadig, “I love your firm; you do some really cool polling of advisors; you polled some advisors on why they are doing this; what did you find?” According to Nadig, VettaFi’s most recent poll on what advisors are using their bond allocations for indicated that one-third of advisors are using bonds for income, with two-thirds saying it was a safety play.
“This is clearly a parking vehicle market,” Nadig said, pointing out that even though there have been flows into funds like iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), most of these inflows are in the short-duration treasuries.
Speaking more about VettaFi and his job as a financial futurist, Nadig acknowledged that most people might know about it from some of the brands under the hood, like ETF Database and Alerian. Nadig said, “What we’re doing is helping asset managers understand what’s going on in the financial advisor market and help financial advisors understand what’s going on in asset management land. We’ve got 450 new funds this year – just helping advisors understand which ones of those are useful tools and which one may be just flash in the pan trading vehicles; that’s really a full-time job itself. Much less trying to look out 3-5 years and trying to see where the market is going.”
The ETFs of Tomorrow
Donning his Financial Futurist hat, Nadig observed two big trends in ETFs, one of which he dubbed the aggressive trading tools – the single stock and single treasury duration maturity ETFs.
“We’ve also seen a lot of interest action in the alternatives space,” Nadig said, pointing to the impressive performance of iMGP DBi Managed Futures Strategy ETF (DBMF) as a great example of the second kind of fund being cooked up in the ETF oven. Nadig expects many more funds, like DBMF, that focus on counter-correlated assets.
Balchunas wondered why currency ETFs focused on the dollar aren’t more popular, given the historic strength of the dollar and its performance five years ago. “I think mostly that’s a fear of international investing, period,” Nadig responded. Funds like Invesco DB US Dollar Index Bullish Fund (UUP) have pulled in a ton of money, but Nadig noted that other funds have struggled to pull in assets because nobody wants to be in emerging markets at all.
ESG is Far From Over
With funds that are explicitly anti-ESG coming to the table, Balchunas pondered whether or not ESG’s moment was over. Nadig said it wasn’t and applauded funds like Engine No. 1 Transform 500 ETF (VOTE), which allows investors to vote with their dollars. Strive’s anti-ESG funds have also made a splash. However, Nadig questioned their implementation, noting the high fees for what is basically a computer chip ETF that doesn’t own Taiwan Semiconductor, “I’m not sure whether the market really needs that or not, but I do think this idea of people voting with their pocketbooks is a good idea.” Nadig also observed that the semiconductor market could see some depression due to conflicts over borders, “it’s not always about just coming up with a clever index. You’ve got to understand the entire microenvironment that lives in.”
For more news, information, and strategy, visit VettaFi.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “We’ve also seen a lot of interest action in the alternatives space,” Nadig said, pointing to the impressive performance of iMGP DBi Managed Futures Strategy ETF (DBMF) as a great example of the second kind of fund being cooked up in the ETF oven. Nadig expects many more funds, like DBMF, that focus on counter-correlated assets. VettaFi Financial Futurist Dave Nadig appeared on Bloomberg’s ETF IQ to discuss the troubled markets, where flows are going, ESG, and more. | “We’ve also seen a lot of interest action in the alternatives space,” Nadig said, pointing to the impressive performance of iMGP DBi Managed Futures Strategy ETF (DBMF) as a great example of the second kind of fund being cooked up in the ETF oven. Nadig expects many more funds, like DBMF, that focus on counter-correlated assets. “This time, what we’ve seen is a lot of money flowing into safety plays,” Nadig said. | “We’ve also seen a lot of interest action in the alternatives space,” Nadig said, pointing to the impressive performance of iMGP DBi Managed Futures Strategy ETF (DBMF) as a great example of the second kind of fund being cooked up in the ETF oven. Nadig expects many more funds, like DBMF, that focus on counter-correlated assets. Bond ETFs are also starting to get some flows, Balchunas observed, saying to Nadig, “I love your firm; you do some really cool polling of advisors; you polled some advisors on why they are doing this; what did you find?” According to Nadig, VettaFi’s most recent poll on what advisors are using their bond allocations for indicated that one-third of advisors are using bonds for income, with two-thirds saying it was a safety play. | “We’ve also seen a lot of interest action in the alternatives space,” Nadig said, pointing to the impressive performance of iMGP DBi Managed Futures Strategy ETF (DBMF) as a great example of the second kind of fund being cooked up in the ETF oven. Nadig expects many more funds, like DBMF, that focus on counter-correlated assets. VettaFi Financial Futurist Dave Nadig appeared on Bloomberg’s ETF IQ to discuss the troubled markets, where flows are going, ESG, and more. | d3021911-c91a-4c14-8071-48643be67af7 |
708792.0 | 2022-10-10 00:00:00 UTC | The Almost Billion Dollar Managed Future ETF Making Waves | DBMF | https://www.nasdaq.com/articles/the-almost-billion-dollar-managed-future-etf-making-waves | nan | nan | Managed futures continue to draw interest and inflows in a year punctuated by market uncertainty and drawdowns. They've been one of the few strategies to offer positive performance and returns when the vast majority of over 2,700 ETFs have underperformed this year amidst persistent, soaring inflation and an aggressive Fed monetary policy.
The performance shouldn’t come as a surprise; managed futures have been called the crisis alpha generators since the financial crisis in 2008 for their ability to flourish in times of market dislocations and volatility when more traditional allocations suffer. Yet their continued strong, uncorrelated return stream this year has caused even the dubious trend-following skeptics to take notice.
Managed futures take positions, both long and short, on a range of asset classes through the futures market based on how those assets are trending, not on a prediction of where they are headed. Managed futures invest across currencies, commodities, bonds, and equities. Big bets this year have included being long on crude earlier in the year, and short on a variety of currencies as the dollar continued to strengthen.
At the forefront of the managed futures ETFs lies the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF is edging progressively closer daily to the $1 billion mark in AUM ($944.4 million as of 7 October 2022), a remarkable feat considering that the fund had just $60 million at the beginning of the year. Year-to-date, the fund currently has a return of 33.20% as of 7 October 2022.
“Managed futures funds are in crash protection mode — as bearishly positioned as any time during the past decade and a half. They’re betting the chaos continues,” Andrew Beer, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, told Financial Times.
How DBMF Outperforms
The fund seeks to replicate the average performance of the 20 largest managed futures hedge funds, known as commodity trading advisors. This eliminates single-manager bias potential while also capturing more alpha through the greatly reduced fees of an ETF -- just 0.85% in the case of DBMF, which is lower than the 2% for hedge funds in addition to the 20% performance fee when the hedge funds perform well.
Image source: Financial Times
“We have outperformed all 20 [underlying CTAs] on a net of fees basis,” Beer said. “We outperform in the smartest and most old-fashioned way: we are cheaper.”
Managed futures as a strategy have gotten a bad reputation over the last decade or more when equities and bonds both performed strongly and diversifier strategies suffered broadly. Now, as the market regime changes — a change that is likely to play out over the next decade — portfolio diversifiers are proving their worth when equities and bonds have both been declined in tandem.
"DBMF's strong performance has made advisors take a closer look at the role managed futures can play in a portfolio. While the investment style is under the radar, management has done an excellent job with education, raising the fund's visibility,” explained Todd Rosenbluth, head of research at VettaFi.
The position that the fund takes within domestic managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds make their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | At the forefront of the managed futures ETFs lies the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF is edging progressively closer daily to the $1 billion mark in AUM ($944.4 million as of 7 October 2022), a remarkable feat considering that the fund had just $60 million at the beginning of the year. They’re betting the chaos continues,” Andrew Beer, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, told Financial Times. | At the forefront of the managed futures ETFs lies the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. They’re betting the chaos continues,” Andrew Beer, co-portfolio manager of DBMF and managing member of Dynamic Beta investments, told Financial Times. 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. | At the forefront of the managed futures ETFs lies the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. How DBMF Outperforms The fund seeks to replicate the average performance of the 20 largest managed futures hedge funds, known as commodity trading advisors. This eliminates single-manager bias potential while also capturing more alpha through the greatly reduced fees of an ETF -- just 0.85% in the case of DBMF, which is lower than the 2% for hedge funds in addition to the 20% performance fee when the hedge funds perform well. | At the forefront of the managed futures ETFs lies the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. How DBMF Outperforms The fund seeks to replicate the average performance of the 20 largest managed futures hedge funds, known as commodity trading advisors. DBMF is edging progressively closer daily to the $1 billion mark in AUM ($944.4 million as of 7 October 2022), a remarkable feat considering that the fund had just $60 million at the beginning of the year. | 3236b322-8a8d-4630-a762-661248a6fdd0 |
708793.0 | 2022-10-05 00:00:00 UTC | DBMF: Large Inflows Detected at ETF | DBMF | https://www.nasdaq.com/articles/dbmf%3A-large-inflows-detected-at-etf | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $111.9 million dollar inflow -- that's a 14.3% increase week over week in outstanding units (from 23,800,000 to 27,200,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average:
Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $33.43. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
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Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $33.43. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $111.9 million dollar inflow -- that's a 14.3% increase week over week in outstanding units (from 23,800,000 to 27,200,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $33.43. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $111.9 million dollar inflow -- that's a 14.3% increase week over week in outstanding units (from 23,800,000 to 27,200,000). Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $111.9 million dollar inflow -- that's a 14.3% increase week over week in outstanding units (from 23,800,000 to 27,200,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $33.43. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the DBMF ETF (Symbol: DBMF) where we have detected an approximate $111.9 million dollar inflow -- that's a 14.3% increase week over week in outstanding units (from 23,800,000 to 27,200,000). The chart below shows the one year price performance of DBMF, versus its 200 day moving average: Looking at the chart above, DBMF's low point in its 52 week range is $25 per share, with $34.59 as the 52 week high point — that compares with a last trade of $33.43. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | f3b8691b-634c-4863-af10-4be12fc33d65 |
708794.0 | 2022-09-30 00:00:00 UTC | How to Successfully Capture Hedge Fund Performance in an ETF: DBMF | DBMF | https://www.nasdaq.com/articles/how-to-successfully-capture-hedge-fund-performance-in-an-etf%3A-dbmf | nan | nan | There’s no denying that alternatives have become much more popular with advisors and investors this year than they have been over the last decade. The environment of sustained volatility and correlated, largely negative performance of stocks and bonds in 2022 have advisors hunting for volatility mitigation, uncorrelated return streams, and diversification, all things that alternatives can provide and hedge funds offer in spades, for a cost.
Hedge funds have a unique structure that lets them straddle the divide between public and private investment, with the ability to invest in illiquid assets that public funds are barred from. Hedge funds can invest in traditional stocks and bonds, derivatives, currencies, commodities, real estate, and essentially anything that the fund manager believes will turn a profit, and can short-sell, leverage, or concentrate their portfolios at will to maximize returns.
Private hedge fund managers such as Millennium Management, D.E. Shaw, and Citadel are some of the strongest performing hedge funds according to Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments in a recent Barron’s interview. Accessing these kinds of hedge funds is incredibly difficult, if not impossible for the average investor, however.
Investing in hedge funds comes with significant hurdles as well as steep fees. Investors must be considered accredited, with a net worth of $1 million minimum, or an annual individual income of $200,000 or more. The amount of money required as an initial investment is usually equally significant, and hedge funds charge a 2% fee based on assets in addition to 20% of profits each year, and some hedge funds require a minimum holding time of several years.
Liquid Alts Offer Better Access, Not Always Better Performance
Liquid alternatives, known as liquid alts, have been an answer to capturing hedge fund strategies within more accessible vehicles such as mutual funds and ETFs. Some strategies have been successful but many have struggled and underperformed in the last decade.
Take, for example, the average liquid alt mutual fund from the Wilshire Liquid Alternative Index in the last 10 years. They have on average offered up only 1.7% annualized returns. Beer believes that the “per annum that these [liquid alt] funds have earned are probably less than the fees on average that were paid to their managers.”
It’s important to understand that no two liquid alts funds are the same. There is a range of strategies and the role of individual manager bias in executing strategy. More factors at play can affect returns. It’s where the iMGP DBi Managed Futures Strategy ETF (DBMF) is different from the competition, particularly within the managed futures ETF space.
DBMF is a managed futures ETF designed to capture performance no matter how equity markets are moving. The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has over $900 million in AUM.
Managed Futures Hedge Fund Strategies Captured in an ETF
Managed futures have been a strong performer in the volatility of 2022, creating significant returns by investing along data trends instead of possible outlooks, and have been one of the most popular alternative strategies sought out by advisors and investors this year. It’s a strategy very much focused on the realities of now compared to possible forecasts of future performance, something that’s proven all but impossible as investors contend with an aggressive Fed and persistent inflation and the uncertainty both have created.
Managed futures are also a strategy that has historically been relegated solely to hedge funds until recent years, locking many investors out of the potential diversification and non-correlated return stream that they can provide portfolios. Managed futures are one of only a handful of strategies that have been successfully translated from hedge funds to the ETF wrapper.
DBMF is an ETF that seeks to replicate the performance of the average of the 20 largest CTA hedge funds, eliminating individual manager risk as well as offering significantly reduced fees — a 0.95% management fee — that allows investors to capture more of the actual return stream than they would if invested in a hedge fund. Year-to-date DBMF’s returns are 32.72%.
The fund also has strong diversification qualities for portfolios because it spans asset classes that are uncorrelated to traditional equities or bonds. It is an actively managed fund that uses long and short positions within derivatives, mostly futures contracts, and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shaw, and Citadel are some of the strongest performing hedge funds according to Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments in a recent Barron’s interview. It’s where the iMGP DBi Managed Futures Strategy ETF (DBMF) is different from the competition, particularly within the managed futures ETF space. DBMF is a managed futures ETF designed to capture performance no matter how equity markets are moving. | Shaw, and Citadel are some of the strongest performing hedge funds according to Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments in a recent Barron’s interview. It’s where the iMGP DBi Managed Futures Strategy ETF (DBMF) is different from the competition, particularly within the managed futures ETF space. DBMF is a managed futures ETF designed to capture performance no matter how equity markets are moving. | Shaw, and Citadel are some of the strongest performing hedge funds according to Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments in a recent Barron’s interview. DBMF is an ETF that seeks to replicate the performance of the average of the 20 largest CTA hedge funds, eliminating individual manager risk as well as offering significantly reduced fees — a 0.95% management fee — that allows investors to capture more of the actual return stream than they would if invested in a hedge fund. It’s where the iMGP DBi Managed Futures Strategy ETF (DBMF) is different from the competition, particularly within the managed futures ETF space. | DBMF is an ETF that seeks to replicate the performance of the average of the 20 largest CTA hedge funds, eliminating individual manager risk as well as offering significantly reduced fees — a 0.95% management fee — that allows investors to capture more of the actual return stream than they would if invested in a hedge fund. Shaw, and Citadel are some of the strongest performing hedge funds according to Andrew Beer, co-portfolio manager of the iMGP DBi Managed Futures Strategy ETF (DBMF) and managing member of Dynamic Beta investments in a recent Barron’s interview. It’s where the iMGP DBi Managed Futures Strategy ETF (DBMF) is different from the competition, particularly within the managed futures ETF space. | 9060cd43-2303-4825-be3d-d7ecf9c0fcc2 |
708795.0 | 2022-09-30 00:00:00 UTC | An ETF to Consider as Wall Street Bets on More Volatility | DBMF | https://www.nasdaq.com/articles/an-etf-to-consider-as-wall-street-bets-on-more-volatility | nan | nan | Wall Street appears to be placing its bets on more volatility ahead as inflation continues to rise while the U.S. Federal Reserve resumes its path of raising interest rates in response to rising prices.
"Over 1.1 million call-option contracts on the Cboe Volatility Index (VIX) traded on Monday, the highest since the Covid-19 crash in March 2020," a Wall Street Journal report noted. "That's over three-times the average of 313,000 contracts that exchanged hands on a daily basis for the year prior to this week."
Treasury yields have been rising higher in the short end of the yield curve, flashing a recession signal. This typically occurs when short-term yields rise above higher yields, adding to the angst in the capital markets.
As such, traders are betting on more market fluctuations to come.
"The surge in activity came as the S&P 500 fell to a new low on the year and the VIX rallied to its highest close since mid-June, according to Susquehanna International Group," the report added. "Traders are betting on bigger stock-market swings across the options universe. Friday saw the most bearish put-options traded across U.S. stocks, ETFs, and indexes since 2008."
Mitigate Risk Like a Hedge Fund
One way to mitigate volatility risk is to adopt strategies implemented by hedge funds. Rather than having to choose between a variety of strategies, another way is to simply get risk mitigation built into an exchange traded fund (ETF) via the iMGP DBi Managed Futures Strategy ETF (DBMF).
The fund is a managed futures fund designed to capture performance no matter how equity markets are moving, and it seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds.
DBMF is actively managed, providing dynamic exposure to long and short positions within derivatives, mostly futures contracts, and forward contracts in a variety of asset classes. The fund makes use of a Dynamic Beta Engine, which is a quantitative model that attempts to ascertain how the largest commodity-trading advisor hedge funds allocate their positions.
The strategy achieves this by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ performance. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually — consider that the CBOE Volatility Index (VIX) is up over 80% for the year.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Rather than having to choose between a variety of strategies, another way is to simply get risk mitigation built into an exchange traded fund (ETF) via the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF is actively managed, providing dynamic exposure to long and short positions within derivatives, mostly futures contracts, and forward contracts in a variety of asset classes. "Over 1.1 million call-option contracts on the Cboe Volatility Index (VIX) traded on Monday, the highest since the Covid-19 crash in March 2020," a Wall Street Journal report noted. | Rather than having to choose between a variety of strategies, another way is to simply get risk mitigation built into an exchange traded fund (ETF) via the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF is actively managed, providing dynamic exposure to long and short positions within derivatives, mostly futures contracts, and forward contracts in a variety of asset classes. This typically occurs when short-term yields rise above higher yields, adding to the angst in the capital markets. | Rather than having to choose between a variety of strategies, another way is to simply get risk mitigation built into an exchange traded fund (ETF) via the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF is actively managed, providing dynamic exposure to long and short positions within derivatives, mostly futures contracts, and forward contracts in a variety of asset classes. Mitigate Risk Like a Hedge Fund One way to mitigate volatility risk is to adopt strategies implemented by hedge funds. | Rather than having to choose between a variety of strategies, another way is to simply get risk mitigation built into an exchange traded fund (ETF) via the iMGP DBi Managed Futures Strategy ETF (DBMF). DBMF is actively managed, providing dynamic exposure to long and short positions within derivatives, mostly futures contracts, and forward contracts in a variety of asset classes. "Over 1.1 million call-option contracts on the Cboe Volatility Index (VIX) traded on Monday, the highest since the Covid-19 crash in March 2020," a Wall Street Journal report noted. | 832b0511-7ecb-4a35-bbef-083fe4d5cb8f |
708796.0 | 2022-09-28 00:00:00 UTC | ETF 360: Rosenbluth and Beer Dive Into Managed Futures, DBMF | DBMF | https://www.nasdaq.com/articles/etf-360%3A-rosenbluth-and-beer-dive-into-managed-futures-dbmf | nan | nan | In the latest episode of ETF 360, VettaFi head of research Todd Rosenbluth is joined by Dynamic Beta investment's Andrew Beer to discuss managed future ETFs.
Managed futures have seen a surge of interest in 2022. Beer noted that the iMGP DBi Managed Futures Strategy ETF (DBMF) has gone from a $65 million AUM fund to about $430 million. "The demand has really been driven by the fact that, during the first half of this year, the whole managed future space did really well," Beer said, pointing to managed futures being up 20% during a period where the S&P was in a bear market, and bonds were tanking.
With the 60/40 portfolio seeming to no longer be the skeleton key it once was, Beer said, "I think you have thousands of advisors who are saying 'where can we get diversification?'"
Managed Futures Diversification Benefits
Rosenbluth asked what role managed futures play in a portfolio. Beer responded, "What we say about managed futures is that it has more diversification bang for the buck than just about any other strategy you could find." Given that it has zero correlation to stocks and bonds, it is an appealing product for quants and model portfolio builders. "What got us interested in this space is called 'crisis alpha.'" According to Beer, the 20% performance during the latest rough market period is no outlier. Historically, managed futures do very well when they are needed most. "It should be in everybody's portfolio," Beer said.
Remarkably, it is barely a blip in the ETF world. Beer sees this as a failure on the education front, one he hopes his firm will push against.
By being early on inflation, managed futures were able to be long oil at the right time, when oil went up, and short treasuries as rates kept increasing. Managed futures were also long the dollar against key currencies at the right time.
Beer calls his strategy a hedge fund replication strategy. "We're not trying to be smarter than the smartest guys that do this. Rather, all we're saying is, if we can use our own ways to figure out how they are positioned, copy it cheaply, and put in an ETF; we can transport the benefit they provide to institutional investors and billion-dollar family offices and bring that to the much broader asset management world that invests through ETFs," he said.
There's No Managed Future Index
Speaking about why the product is actively managed, Beer said, "there is no index like the S&P 500 that you can invest in and get exposure to managed futures." He continued, "because there is no index, there is no way to really vanguard the space. The closest you can get is by doing what we do."
For more ETF 360 videos, visit the ETF 360 Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Beer noted that the iMGP DBi Managed Futures Strategy ETF (DBMF) has gone from a $65 million AUM fund to about $430 million. Beer responded, "What we say about managed futures is that it has more diversification bang for the buck than just about any other strategy you could find." Given that it has zero correlation to stocks and bonds, it is an appealing product for quants and model portfolio builders. | Beer noted that the iMGP DBi Managed Futures Strategy ETF (DBMF) has gone from a $65 million AUM fund to about $430 million. In the latest episode of ETF 360, VettaFi head of research Todd Rosenbluth is joined by Dynamic Beta investment's Andrew Beer to discuss managed future ETFs. Managed Futures Diversification Benefits Rosenbluth asked what role managed futures play in a portfolio. | Beer noted that the iMGP DBi Managed Futures Strategy ETF (DBMF) has gone from a $65 million AUM fund to about $430 million. "The demand has really been driven by the fact that, during the first half of this year, the whole managed future space did really well," Beer said, pointing to managed futures being up 20% during a period where the S&P was in a bear market, and bonds were tanking. Managed Futures Diversification Benefits Rosenbluth asked what role managed futures play in a portfolio. | Beer noted that the iMGP DBi Managed Futures Strategy ETF (DBMF) has gone from a $65 million AUM fund to about $430 million. With the 60/40 portfolio seeming to no longer be the skeleton key it once was, Beer said, "I think you have thousands of advisors who are saying 'where can we get diversification?'" Managed Futures Diversification Benefits Rosenbluth asked what role managed futures play in a portfolio. | df2fc9a1-f4c3-441e-bac5-545a8322b8a1 |
708797.0 | 2022-09-28 00:00:00 UTC | Defensive ETF (DBMF) Hits New 52-Week High | DBMF | https://www.nasdaq.com/articles/defensive-etf-dbmf-hits-new-52-week-high | nan | nan | For investors seeking momentum, iMGP DBi Managed Futures Strategy ETF DBMF is probably on radar. The fund just hit a 52-week high and is up 38.2% from its 52-week low price of $25.00/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
DBMF in Focus
iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. It will employ long and short positions in derivatives, primarily futures contracts and forward contracts, across the broad asset classes of equities, fixed income, currencies and commodities. The product charges 85 bps in annual fees (see: all the Hedge Fund ETFs here).
Why the Move?
Hedge volatility ETFs has been an area to watch lately as it could prove beneficial amid market uncertainty. These funds have the potential to stand out and outperform simple vanilla funds in case of rising volatility. Economists warned that the rapid tightening would hurt the labor and the housing spaces, thereby pushing the economy into recession and impacting the stock market.
More Gains Ahead?
Currently, DBMF might remain strong given a weighted alpha of 28.16 and 20-day volatility of 10.97%. As a result, there is definitely still some promise for risk-aggressive investors, who want to ride on this surging ETF.
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iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For investors seeking momentum, iMGP DBi Managed Futures Strategy ETF DBMF is probably on radar. Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed: DBMF in Focus iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. Currently, DBMF might remain strong given a weighted alpha of 28.16 and 20-day volatility of 10.97%. | For investors seeking momentum, iMGP DBi Managed Futures Strategy ETF DBMF is probably on radar. Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed: DBMF in Focus iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | For investors seeking momentum, iMGP DBi Managed Futures Strategy ETF DBMF is probably on radar. Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed: DBMF in Focus iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | For investors seeking momentum, iMGP DBi Managed Futures Strategy ETF DBMF is probably on radar. iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed: DBMF in Focus iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. | 977bf7c0-7ae7-4888-9b34-f1930d81004d |
708798.0 | 2022-09-27 00:00:00 UTC | Markets Trending Towards Worst 9 Months Since Dot-com Crash | DBMF | https://www.nasdaq.com/articles/markets-trending-towards-worst-9-months-since-dot-com-crash | nan | nan | An aggressive Fed, world economy fears, persistent inflation, and a 20-year high for the U.S. dollar, take your pick of any number of factors right now that are contributing to market decline and volatility as investor fear grows. Above it all continue to float managed futures, the crisis alpha generators that have more than proven their mettle in the sea of volatility in 2022, offering several benefits for portfolios, not the least of which have been strong returns this year.
Stocks continue to fall further into bear territory on trading Tuesday after the Dow Jones Industrial officially closed Monday afternoon in a bear market. The S&P 500 on Tuesday set a new low for the year and is currently trading at 21.4% below its January highs as of midday trading while the Nasdaq is off 33% from November record highs.
Should the trend continue for the rest of the week, September would round out the worst first nine months for the S&P 500, Nasdaq, and Dow Jones since 2002 and the height of the dot-com crash.
“The fact that we lost support at both 3900, 3800 and certainly made a beeline to the June lows tells you that the risk-off environment hasn’t changed much over the course of the last six weeks,” Art Hogan, chief market strategist at B. Riley Financial, told CNBC. “We’re still concerned that the Fed is going to overdo it and push the economy into recession.”
Managed Futures Vastly Outperforming While Markets Plummet
Investors looking for a fund that has performed well during volatility should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving.
The fund seeks long-term capital appreciation by investing in some of the most liquid U.S.-based futures contracts in a strategy utilized by hedge funds and has 34.66% returns year-to-date as of 09/26/2022. It has an AUM of nearly $850 million, the largest of any managed futures ETF.
DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. It is an actively managed fund that uses long and short positions within derivatives, mostly futures contracts, and forward contracts. These contracts span domestic equities, fixed income, currencies, and commodities (via its Cayman Islands subsidiary).
The position that the fund takes within domestic managed futures and forward contracts is determined by the Dynamic Beta Engine. This proprietary, quantitative model attempts to ascertain how the largest commodity-trading advisor hedge funds have their allocations. It does so by analyzing the trailing 60-day performance of CTA hedge funds and then determining a portfolio of liquid contracts that would mimic the hedge funds’ 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. Under normal market conditions, the fund seeks to maintain volatility between 8%–10% annually.
DBMF has a management fee of 0.95%.
For more news, information, and strategy, visit the Managed Futures Channel.
Read more on ETFtrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | “We’re still concerned that the Fed is going to overdo it and push the economy into recession.” Managed Futures Vastly Outperforming While Markets Plummet Investors looking for a fund that has performed well during volatility should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | “We’re still concerned that the Fed is going to overdo it and push the economy into recession.” Managed Futures Vastly Outperforming While Markets Plummet Investors looking for a fund that has performed well during volatility should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | “We’re still concerned that the Fed is going to overdo it and push the economy into recession.” Managed Futures Vastly Outperforming While Markets Plummet Investors looking for a fund that has performed well during volatility should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | “We’re still concerned that the Fed is going to overdo it and push the economy into recession.” Managed Futures Vastly Outperforming While Markets Plummet Investors looking for a fund that has performed well during volatility should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), a managed futures fund designed to capture performance no matter how equity markets are moving. DBMF allows for the diversification of portfolios across asset classes that are uncorrelated to traditional equities or bonds. 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. | f2d51e47-d88e-4b68-8710-7047deb38ee5 |
708799.0 | 2022-09-27 00:00:00 UTC | 5 ETFs Up 20% or More in the First Nine Months of 2022 | DBMF | https://www.nasdaq.com/articles/5-etfs-up-20-or-more-in-the-first-nine-months-of-2022 | nan | nan | Wall Street has been on a tough ride this year, with all the three major indices slipping into a bear market (a drop of 20% or more from a recent high). Russia’s invasion of Ukraine, aggressive rate hikes by the Fed and global growth concern have roiled the stock market badly.
While most corners of the market were in deep red, a few have performed well. Simplify Interest Rate Hedge ETF PFIX, KFA Mount Lucas Index Strategy ETF KMLM, Invesco Dynamic Energy Exploration & Production ETF PXE, iMGP DBi Managed Futures Strategy ETF DBMF and Invesco DB US Dollar Index Bullish Fund UUP from various corner of the stock market gained in double digits in the first nine months.
These funds have been this year’s star performers and could also be winners for the reminder of 2022 if the current trends continue.
Market Trends
The Federal Reserve has been on an aggressive tightening policy to fight skyrocketing inflation, which is near its highest levels since the early 1980s. Inflation is hovering near a 40-year high, dashing investors’ hopes with the possibility that price pressures would weaken (read: Guide to Interest Rates Hike and ETFs).
Fed Chair Jerome Powell raised interest rates by another three-quarters of a percentage point in the meeting last week. This marks the third consecutive interest rate hike of 0.75% and brings the benchmark interest rate to 3.0-3.25%, the highest level since 2008. The increase in interest rates will make borrowing expensive, driving up the cost of buying a new car or house or push up the cost of carrying credit card debt and thus slow down economic growth. The central bank also signaled that additional large rate hikes were likely at the upcoming meetings as it combats inflation that remains near a 40-year high.
Fed officials now expect the federal funds rate in a range of 4.25% to 4.5%, a full percentage point above 3.25% to 3.5% to end 2022, projected in June. This suggests that the central bank could approve another three-quarter point hike at its November meeting and then a half-point rate rise in December. The rapid pace of tightening has bolstered the case for the economy falling into recession.
Further, bouts of weak economic data across the globe added to global slowdown fears. Economic activity in China, the world's second-largest economy, has been declining and the property sector is also suffering. Euro zone inflation also rose to another record high.
Simplify Interest Rate Hedge ETF (PFIX) – Up 74.6%
Simplify Interest Rate Hedge ETF seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases, while providing the potential for income. It buys put options on longer-term Treasury bonds to offer “the most liquid and the most cost-efficient way of getting interest rate protection.” Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge.
PFIX has accumulated $342.4 million in its asset base and trades in an average daily volume of 150,000 shares. It charges 50 bps in annual fees.
KFA Mount Lucas Index Strategy ETF (KMLM) – Up 47.4%
KFA Mount Lucas Index Strategy ETF is benchmarked to the KFA MLM Index, which consists of a portfolio of 22 liquid futures contracts traded on U.S. and foreign exchanges. The Index includes futures contracts on 11 commodities, six currencies, and five global bond markets. These three baskets are weighted by their relative historical volatility, and within each basket, the constituent markets are equal-dollar weighted.
KFA Mount Lucas Index Strategy ETF has amassed $244.5 million in its asset base and trades in average daily volume of 65,000 shares. It charges 92 bps in annual fees.
Invesco Dynamic Energy Exploration & Production ETF (PXE) – Up 33.9%
Invesco Dynamic Energy Exploration & Production ETF follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies involved in the exploration and production of natural resources used to produce energy based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value (read: Should You Buy Energy ETFs On Dip?).
Holding 32 stocks in its basket, Invesco Dynamic Energy Exploration & Production ETF has amassed $266.5 million in its asset base and charges 63 bps in annual fees. It trades in a volume of 163,000 shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.
iMGP DBi Managed Futures Strategy ETF (DBMF) – Up 33%
iMGP DBi Managed Futures Strategy ETF seeks long-term capital appreciation. It will employ long and short positions in derivatives, primarily futures contracts and forward contracts, across the broad asset classes of equities, fixed income, currencies and commodities.
iMGP DBi Managed Futures Strategy ETF has AUM of $820.7 million and charges 85 bps in annual fees. It trades in a moderate volume of 499,000 shares a day on average (read: 5 ETFs Hitting 52-Week High Amid Market Turmoil).
Invesco DB US Dollar Index Bullish Fund (UUP) – Up 19.6%
Invesco DB US Dollar Index Bullish Fund is the prime beneficiary of a rising dollar as it offers exposure against a basket of six world currencies — euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. This is done by tracking the Deutsche Bank Long US Dollar Index Futures Index Excess Return plus the interest income from the fund’s holdings of U.S. Treasury securities.
Invesco DB US Dollar Index Bullish Fund has so far managed an asset base of $2 billion while seeing an average daily volume of around 4 million shares. It charges 77 bps in total fees and expenses and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
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Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports
Invesco Dynamic Energy Exploration & Production ETF (PXE): ETF Research Reports
iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports
KFA Mount Lucas Index Strategy ETF (KMLM): ETF Research Reports
Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Simplify Interest Rate Hedge ETF PFIX, KFA Mount Lucas Index Strategy ETF KMLM, Invesco Dynamic Energy Exploration & Production ETF PXE, iMGP DBi Managed Futures Strategy ETF DBMF and Invesco DB US Dollar Index Bullish Fund UUP from various corner of the stock market gained in double digits in the first nine months. iMGP DBi Managed Futures Strategy ETF (DBMF) – Up 33% iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | Simplify Interest Rate Hedge ETF PFIX, KFA Mount Lucas Index Strategy ETF KMLM, Invesco Dynamic Energy Exploration & Production ETF PXE, iMGP DBi Managed Futures Strategy ETF DBMF and Invesco DB US Dollar Index Bullish Fund UUP from various corner of the stock market gained in double digits in the first nine months. iMGP DBi Managed Futures Strategy ETF (DBMF) – Up 33% iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | Simplify Interest Rate Hedge ETF PFIX, KFA Mount Lucas Index Strategy ETF KMLM, Invesco Dynamic Energy Exploration & Production ETF PXE, iMGP DBi Managed Futures Strategy ETF DBMF and Invesco DB US Dollar Index Bullish Fund UUP from various corner of the stock market gained in double digits in the first nine months. iMGP DBi Managed Futures Strategy ETF (DBMF) – Up 33% iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | Simplify Interest Rate Hedge ETF PFIX, KFA Mount Lucas Index Strategy ETF KMLM, Invesco Dynamic Energy Exploration & Production ETF PXE, iMGP DBi Managed Futures Strategy ETF DBMF and Invesco DB US Dollar Index Bullish Fund UUP from various corner of the stock market gained in double digits in the first nine months. iMGP DBi Managed Futures Strategy ETF (DBMF) – Up 33% iMGP DBi Managed Futures Strategy ETF (DBMF): ETF Research Reports | fb0e7acf-1dd6-44c7-bc44-3432eda0c083 |
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