At The Money: Diversifying with Managed Futures ETFs

February 26, 2026·21 min·2 clips

Hedge fund veteran Andrew Beer explains why bonds have become a failed diversifier, earning less than cash for 10 years.

Managed futures start with suspicion. The host asks why a leveraged, long-short, derivative-based strategy that can feel black-box-like belongs in an investor portfolio at all. The guest's answer is not that the label sounds comforting. It is that stocks and bonds have their own ugly history. Equities have had 40%, 50%, and several 20% plus declines over 25 years. Bonds had a 16% drawdown too, which dents the tidy idea that traditional allocations are always the safe side of the portfolio. The word managed does some work here. The guest says the strategy is called managed for a reason, and leverage by itself does not settle the risk question. Then the conversation gets more pointed. The host asks about strategies that start out as non-correlated alpha sources and slowly slide back toward equity beta. That is the fake diversification problem, and it is where the guest gets blunt about traditional asset management. He argues that the industry has destroyed value for decades after fees because low-cost index products have done better. Product development comes in for the hardest hit. In his view, hedge funds at least usually begin with a perceived investment opportunity, while traditional firms often begin with what the salesperson can sell. Ben Johnson's spaghetti cannon line fits: hundreds and hundreds of products get launched, then firms talk up the one that worked and forget the rest. Many do not pass a serious diversification test. Barry Ritholtz brings it back to portfolio use. Managed futures and liquid alternatives sit beside high yield bonds, non-US equities, and other diversifiers as one more tool. DBI comes up as a lower-cost, liquid ETF wrapper for managed futures and liquid alts. The idea is not to load up. Andrew suggests 3%. Barry does not disagree, but he warns against turning it into a 20% or 30% allocation.

As heard by us

A sober case for managed futures as a small diversifier, not a miracle trade.

At The Money treats managed futures as a portfolio design question, not a jargon test. Barry Ritholtz and his guest keep returning to a familiar tension: these strategies can seem strange, even risky, because they are leveraged, long-short, and derivative-based, but the real…

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A clear case for adding a small diversifier when portfolios start moving in lockstep.

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