At the Money: Seeking Uncorrelated Returns

In this episode of Bloomberg's At The Money, host Barry Ritholtz explores the growing importance of uncorrelated returns in modern portfolio construction, focusing on managed futures as a powerful diversifier. With traditional 60-40 portfolios failing to protect against simultaneous stock and bond downturns—most notably in 2022—the conversation turns to alternative strategies that thrive when correlations collapse. Andrew Beer, founder of Dynamic Beta Investments and creator of the DBMF ETF, explains how managed futures, particularly through a low-cost, transparent ETF structure, can deliver positive returns during market crises like the dot-com crash, GFC, and the inflation surge of 2022. Beer argues that the strategy’s strength lies not in complex models or obscure markets, but in its ability to detect macro shifts early—such as rising interest rates, currency moves, or commodity spikes—through simple, liquid instruments like S&P 500, Treasury bonds, gold, oil, and major currencies. He emphasizes that efficiency and simplicity, not complexity, are key to outperforming expensive hedge fund versions of the same strategy. The episode concludes with a strong endorsement of DBMF as the most efficient, accessible way for individual investors to gain exposure to this critical diversifier. Key takeaways include: (1) Managed futures are one of the few proven strategies that deliver positive returns when both stocks and bonds fall; (2) The DBMF ETF achieves this through a simple, transparent portfolio of just 10 highly liquid futures contracts; (3) Efficiency—both in cost and execution—allows the ETF to outperform hedge fund versions by 300–400 basis points annually; (4) Investors should consider managed futures as a core diversifier, not a speculative bet; and (5) The strategy is especially valuable in an era of high inflation, geopolitical uncertainty, and potential loss of confidence in U.S. assets.