Managed futures are posting their worst results in years while global macro discretionary funds soar. The contrast reveals how investors often misunderstand what these strategies are built to do — and when they’re supposed to deliver.
It’s one of the oldest patterns in investing: a strategy stumbles, investors question whether it’s broken, they flee, and then it comes back to life.
On the surface, the two strategies look similar. Both aim to protect portfolios when markets unravel. Both trade in global currencies, futures, commodities, and fixed income.
But they work in very different ways. Managed futures, also called commodity trading advisors (CTAs), are systematic and primarily employ trend-following strategies, while human portfolio managers lead global macro discretionary funds, analyzing broad economic, policy, geopolitical and other macro factors.
But “many investors use the two strategies interchangeably,” says Jon Caplis, founder and CEO of hedge fund research firm PivotalPath, despite big differences