Managed Futures ETFs Rising to Diversification Call

One of the areas that has been getting a lot of attention is private assets, as they find their way into ETFs and offer diversification. But there’s a quieter corner of the alternatives ETF category that has been picking up assets this year. That’s managed futures ETFs. 

A look at flows data shows that some managed futures ETFs are among the most in-demand alternatives ETFs this year. The Simplify Managed Futures Strategy ETF (CTA ) has taken in more than $570 million in net new assets so far in 2025, and is now a billion-dollar ETF. The Invesco Managed Futures Strategy ETF (IMF) is another, having now taken in some $300 million year to date. 

Managed futures ETFs are trend-following strategies that are built on diversification. They are long/short portfolios that access multiple assets and asset classes through futures contracts. Not all managed futures ETFs are the same, but they follow the same idea that "trend is your friend.” They deliver broadly diversified multi-asset exposure by taking long or short positions, accordingly.  

One of the diversifying powers of managed futures ETFs is their low or complete lack of correlation to equities and bonds. That makes them interesting complements — aka: diversifiers — in a traditional 60/40-type portfolio. 

If we plot CTA, as an example, against the SPDR S&P 500 Trust (SPY A) and the Vanguard Total Bond Market ETF (BND A), we find CTA currently has a negative correlation of about -0.08 and -0.37, respectively, to each of those funds. 

VettaFi PRO data also shows Invesco’s IMF, as another example, carries a low correlation of 0.33 and 0.12 to SPY and BND, respectively.

The main difference between the two strategies lies in the way they each approach trend-following. And remember that CTA and IMF are just two examples of managed futures ETFs in a category with many interesting funds. We are looking at them more closely because they’ve led asset-gathering in this category this year.  

At a high level, CTA doesn’t invest in all markets. The strategy excludes equities and currencies, limiting exposure to commodities and interest rates. Why? Specifically to deliver absolute returns that are uncorrelated to equities, something that has worked well this year. The ETF, which is about three years old, is already a $1 billion fund. 

CTA’s current portfolio positioning includes long bets on Treasury bills, agricultural commodities, and gold, among other things, according to Simplify data. 

IMF takes a different approach. It invests in about 50 global markets — including equities and bonds — as well as commodities and currencies, according to the prospectus. It takes a broader view of the opportunity set. 

Managed futures ETFs tend to work well when there are clear price trends in the market, something that 2025 has been lacking across many markets due to so much uncertainty. 

“The trend is your friend until it’s not,” Nardini said. ”In an environment like this year, where we’ve had a lot of ups and downs, a tariff tantrum, and a lot of volatility, these ETFs aren’t removed from that broader headwind. 

“If there’s no trend, it’s really difficult for a trend-following strategy to capture alpha,” she added. “However, our algorithm that’s driving positioning looks at more than just trends.” 

That trend-following plus something isn’t unique to CTA. In the fund’s case, CTA considers momentum in asset prices, and fundamental macro factors that either “amplify or dampen” the price trend signal. In its fixed income positions, it also takes into account the shape of the interest rate curve to evaluate interest rate position exposure. 

IMF, on the other hand, follows the price trends of different assets in a systematic way, but adjusts the “magnitude” of the position — long or short — based on how strong that trend is. The stronger a price trend is, the larger the position. As of mid-April, IMF’s long/short positions show a strong bet on the power of capital preservation found in cashlike positions, Invesco data shows.

These trend-following-plus-something methodologies aren’t rarebut they also aren’t universal.

A fund like the Blueprint Chesapeake Multi-Asset Trend ETF (TFPN B-), which invests in as many as 500 securities across equities, fixed income, commodities, and currencies, simply follows the price trends, period. In fact, the fund’s ticker looks to capture that methodology: Trend Following Plus Nothing — TFPN. 

As a category, managed futures ETFs offer low-correlated or uncorrelated returns to a core equity/bond portfolio, and ample diversification, something that has been in high demand this year. 

For more research, check out our list of managed futures ETFs, and, more broadly, alternatives ETFs.

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