Investing Ideas

Managed futures as a powerful portfolio diversifier

This alternative investment style, in use for decades, has become an increasingly important tool for investors seeking to enhance diversification and improve overall portfolio resilience.

By: Roberto Croce Sladja Carton
Updated: 7/28/2025
Key Takeaways
  • “Managed futures” is a liquid alternative investment strategy that can help investors diversify their portfolios, mitigate risk, and compound returns over time.
  • The strategy systematically seeks to capture price trends, both upward and downward, across global equity, fixed income, currency, and commodity markets.
  • Managed futures offers a differentiated return profile characterized by negative to low correlation to traditional asset classes and a historical record of generating its strongest alpha during periods of market stress and dislocation.
  • Even a modest allocation to managed futures has historically improved risk adjusted returns and reduced portfolio volatility and drawdowns within traditional 60/40 frameworks.
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Managed Futures as a Powerful Portfolio Diversifier
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The fundamentals of managed futures strategies, and how Fidelity invests Flyer
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  • For important information, see the full linked content.
Alternative investment strategies may not be suitable for all investors and are not intended to be a complete investment program. Alternatives may be relatively illiquid; it may be difficult to determine the current market value of the asset; and there may be limited historical risk and return data. Costs of purchase and sale may be relatively high. A high degree of investment analysis may be required before investing.
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