At The Money: Seeking Uncorrelated Returns (April 8, 2026)
Managed Futures generate returns that are not correlated with stocks or bonds. Investors who are looking for greater diversification can do so through ETFS that own futures on commodities, currencies, and interest rates.
Full transcript below.
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About this week’s guest:
Andrew Beer is a hedge fund veteran and founder of Dynamic Beta Investments, a firm focused on hedge-fund replication strategies delivered through low-cost, liquid vehicles like ETFs and mutual funds. His ETF, DBi Managed Futures Strategy (DBMF) attempts to replicate pricier managed futures portfolios
For more info, see:
Firm website
Masters in Business
LinkedIn
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At the Money with Barry Ritholtz
Guest: Andrew Beer, Founder of Dynamic Beta Investments April 8, 2026
TRANSCRIPT:
Barry Ritholtz: Lots of asset classes, promise uncorrelated returns, but very few deliver. One that does is managed futures. Sure they’re expensive and the trading is somewhat spiky. But when all correlations go to one, meaning everything is trading in lockstep, like we saw during the financial crisis or the first couple of months of COVID, managed futures seem to be the rare diversifier that works.
Barry Ritholtz: To help us unpack how to get additional diversification in your portfolio, let’s bring in Andrew Beer. He’s a hedge fund veteran and founder of Dynamic Beta Investments, a firm focused on hedge fund replication strategies delivered through low cost liquid vehicles like ETFs and mutual funds. His ETF DBI managed Future Strategy tries to replicate the premier managed futures portfolio. So Andrew, start us out with just the elevator pitch.
Barry Ritholtz: What problem does DBI manage future strategy — and that’s ETF, ticker DBMF — what does that solve for the traditional 60/40 investor?
Andrew Beer: Sure. So first of all, thank you very much for having me on. So diversification has changed a lot this decade. In the 2000s and 2010s, you really didn’t need anything other than stocks and bonds, but things have changed. You know, since inflation started to come back, stocks have tended to move up and down with bonds and did not protect in 2022.
Andrew Beer: And so what you see across the wealth management space is basically saying 60/40 worked for a long time, but now we need something else. And what is that something else? It’s generally something that has a low correlation to, ideally to both stocks and bonds and can also deliver positive performance when you need it the most. And so we looked — we were looking around for something like that about 10 years ago and we zeroed in on this space.
Andrew Beer: It’s a niche area of the overall hedge fund business, but it’s been around for 50 years. It’s battle tested through all sorts of market environments and you find something that actually meets those criteria — did well during the dot-com crisis, did well during the GFC, and then after we’d invested it, you know, it was up 20% during 2022. And from our perspective, it’s like, that’s great if you’re an institutional allocator, but how do we get the great benefits of this strategy and package it in a way that, you know, my sister or my cousin or something can put into their portfolios as well.
Barry Ritholtz: Really, really interesting. So since 2022, the asset class we’ve all been probably hearing the most about has been private credit, private debt, private equity. Hey, it’s a great diversifier — to be blunt.
Barry Ritholtz: I get the sense that debt and credit are gonna move if we have a recession, if markets sell off 20, 30%. Is there any reason to think that sort of diversifier is not gonna do the same thing?
Andrew Beer: So what’s interesting about it — there’s been a lot of debate about how these guys happen to make money during these big moments in the markets where it feels like nothing is working. And it’s funny because people talk about — sometimes people use a term called trend following or momentum associated with a strategy. To me, it’s totally wrong. When the strategy generates those kinds of returns, it’s because they’re early, contrarian, and right in a big way.
Andrew Beer: And so if you think about it, if somebody came to you and said, here’s a strategy — here was a person who had been buying gold below 3000, who was betting on rising interest rates as far back as September 2020, who saw in advance the rise in the dollar relative to the Japanese yen — these kind of big trades out there because the world is changing in some way. That’s what the strategy has historically been able to pick up on. And so I believe that structurally we are likely to see more of those things over the next several years. And this is one of those strategies that has proven its ability to reposition, to take advantage of those big changes in the world.
Barry Ritholtz: Really, really interesting. So you mentioned trend or momentum — define managed futures without Wall Street jargon. What does DBMF actually mean by exposure to trend?
Andrew Beer: Okay, so I’ll start with the definition of the strategy overall, which is basically what I mentioned — they’re trying to detect big changes in the world. The way I think about that as a hedge fund person is that somebody knows something — that the world is changing — and they’re acting on it with buying or selling different asset classes. Like if the world is changing in a big way, people tend to act on it with their portfolios. And so managed futures as a strategy will often look at lots and lots and lots of the price moves across lots and lots of different markets to pick up these kernels of information that something big is changing.
Andrew Beer: So if you take last year where our core strategy was up 14%, it was in part by being early in the fact that — the run at hot rate — it was continuing to have a long position in gold when gold went through its melt up. And so outside of — I think a lot of people in this space like to talk about how the sausage is made. Our view is actually what’s much more interesting for the end investor and for allocators is how does this actually help you and why should somebody looking at this in their portfolio be glad that it’s there?
Barry Ritholtz: Makes a lot of sense. I guess one of the things that make this space so interesting is, yeah, it’s a good diversifier, but most traditional investors don’t really pay attention to it. You’ve called managed futures the best diversifier no one buys.
Barry Ritholtz: Explain why that is.
Andrew Beer: Well, I’m convincing people — I’m changing hearts and minds one at a time. So a lot of the people in this space love to talk about the technical aspects. The underlying strategies are very, very technical. They’re quantitative models looking at derivative contracts on sometimes hundreds of underlying instruments.
Andrew Beer: And so it’s a little bit like they love to talk shop with each other about what they’re doing. Part of our success as a business is I don’t come at it from that direction. I come at it from the perspective of why will this make my portfolio better? By which I mean help to grow assets and help me sleep at night.
Andrew Beer: And so if you look at it, I’m making progress. When I got into the ETF space — this is in 2019 — there was only about 300 million. There’s maybe close to 5 billion today. Wow.
Andrew Beer: And in part, we’ve been really driving that — that this is something that — and I think if you look five years out from now, you sit down with an advisor and they’ll say, hey, what’s that three or 5% position there? And they’ll say it’s managed futures. It’s one of these strategies. And you’ll say, well, what’s it there for?
Andrew Beer: And they’ll say, well, look, every now and then, the world changes a lot and we want a nimble, flexible strategy that can take advantage of it in the way that the other 97% of your portfolio is not likely to.
Barry Ritholtz: So let me revisit that information in a slightly different question. Whenever I’m speaking to clients or potential clients, the question is always: we have this problem, how do we solve for this? So really the question I want to ask you is, what problem in the traditional managed future space convinced you that a replication-based ETF like DBMF really needed to exist? What’s the problem you’re solving for the average ETF investor?
Andrew Beer: So I would start with the — actually I would first ask the broader question. What problem are we solving for people in their portfolios, right? The modern wealth management business, just like the institutional investment business, just like 60/40 portfolios, is based upon two fundamental ideas. One is diversification is a net positive, and two is have long-term views for your asset allocation models and don’t change them often.
Andrew Beer: It’s the latter part. And that has a generation of investors has not gotten head faked by liberation day and all these moves in the market because they’ve been trained: don’t panic and don’t overreact. And that works 80% of the time.
Barry Ritholtz: 80% isn’t bad, by the way.
Andrew Beer: 80% isn’t bad. Right. And which is why that should be 95% of your portfolio. 20% of the time the world changes. And by design they will be slow to adapt.
Andrew Beer: So where are we right now? Right? The US dollar is getting debased in some fashion, right? There is this potential loss of confidence in US assets at a time where everyone is massively overexposed to US assets that could play out over five or seven years.
Andrew Beer: But most allocators will not change until the horses have left the barn, so to speak. And that’s what it’s trying to solve from a portfolio perspective. What we were trying to solve is, it’s a great strategy, it’s just too damn expensive the way people run it. And it’s not just what are their management fees and incentive fees, it’s also, they run these Rube Goldberg-like portfolios that trade every day, hundreds of times a day.
Andrew Beer: And when we looked at it, we said, look, we love the signal that they’re picking up on. But if we can do that in a simple portfolio that is much more liquid, we can save hundreds of basis points of implementation cost and take more of the value and pass it back to clients.
Barry Ritholtz: So let’s talk about that a little bit and use some real life examples. How does either DBMF or funds like it — in the period before DBMF was trading — how does it behave in periods like the dot-com implosion or the GFC or COVID?
Andrew Beer: Well, I would say, so COVID was — when the strategy does the best is when I say the world is changing, and COVID was a very strange thing. The world changed in three weeks basically, and so it’s not really designed for that kind of a flash move, but still it preserved capital as a strategy during March when things were getting hammered. Where it thrives is periods like 2022 — inflation’s coming back. And I’ll tell you a great story. I wrote a paper on inflation coming back in early 2021, and I was talking about it to people all year long. And I said, if inflation comes back — and Powell came out and said it’s probably not coming back, it’s transitory or something. But I get to December and I’m sitting down with a guy who says, I totally agree with you, I think inflation is coming back.
Andrew Beer: And I said, how are you rebalancing your portfolio? And he said, I’m selling my stocks and buying bonds — because he was benchmarked to 60/40 and stocks had gone up more than bonds. So I think it’s important as allocators to recognize that there are gonna be times like this when the standard playbook that we have from an asset allocation perspective is not designed to pick up on that. And here’s a strategy.
Andrew Beer: So the overall strategy in 2022, when stocks and bonds were both down 15 to 20%, the strategy went up 20% overall. And by being a bit more efficient, we went up a bit more than that.
Barry Ritholtz: Really kind of interesting. So let’s talk about the managed futures ETF. What markets does it trade?
Barry Ritholtz: What positions does it hold? Like I typically think when I hear trend following, I think Michael Covel’s trend following book, and I think primarily of commodities — if you’re watching gold or silver these days — but it’s a little more broad than that. Tell us the assets DBMF actually trades.
Andrew Beer: Yeah, so what is extraordinarily irritating to people in the industry is that we do much better than them with only 10 instruments. And the 10 instruments that we trade are the biggest, most obvious instruments. So S&P 500 — this is all futures contracts, by the way.
Barry Ritholtz: Right. So the index, not individual stocks.
Andrew Beer: Exactly. So S&P 500, non-US developed markets, emerging markets for equities — that’s it. In fixed income, the second asset class is fixed income: two year, 10 year, 30 year Treasuries. In commodities, we only trade gold and oil.
Barry Ritholtz: Gold and oil. The assumption is other precious metals will track gold. Right. And oil is its own thing.
Barry Ritholtz: No agricultural products.
Andrew Beer: We don’t, because the markets — we don’t think — in other words, just the last category is in currencies. It’s the euro and the yen.
Barry Ritholtz: Yen, but not the dollar. Well —
Andrew Beer: Against the dollar.
Barry Ritholtz: I gotcha. All right.
Andrew Beer: So —
Barry Ritholtz: Always relative with currency.
Andrew Beer: Yeah. And so look, what our research showed early on is that — it’s like what’s the political expression? It’s the economy, stupid. It’s the big trade, stupid. In 2022, to be up 20%, you want to be long crude oil in February, you want to be short the yen when it goes from 110 to 160, and you want to be short Treasuries when interest rates go up.
Andrew Beer: And a lot of the narrative in the space, as you say, is exactly that. You know, like look at copper moves, look at the spike in copper, the palladium or other things. It sounds good if you’re an institutional investor who cares about this stuff, but it doesn’t — it’s not big enough to make an impact on the P&L. And so our research is very powerful and it basically showed that if these guys make 10, in theory as a hedge fund investor, you’re likely to get five. I can give you 10 with a simpler and much more efficient portfolio and give you eight or nine and put it into an ETF where you can see every single position every single day.
Andrew Beer: So the basic idea is I wanted to show that we could beat hedge funds at their own game, but do it in an ETF, which no one had ever done before.
Barry Ritholtz: So you don’t have the drag of two and twenty, the cost structure is a little less — or a whole lot less. Maybe it’s about what the typical ETF is. So this has turned out to be a very successful product. DBMF is now the largest managed futures ETF.
Barry Ritholtz: Couple of questions. At what point do you begin to run into capacity constraints for the strategy? Do you have any issues with liquidity or slippage or even market impact? Like how big can this get?
Andrew Beer: It was designed to get as big as we needed to get, really. Because of the instruments that we’re trading, these are the deepest and most liquid instruments that are traded globally. And we trade everything in the US, and so our market impact is essentially zero.
Andrew Beer: I came from — I had started a commodity business — and one of the things that I think people have overlooked is complexity often has a real cost. It sounds great to say I’m trading some esoteric market someplace. When things go bad, like in the week after liberation day, the people who are trading those markets are waiting to see your order come in.
Andrew Beer: That’s right. You are making their year on the days. And so look, I come from a school that simple, efficient is gonna win most of the time. And what we’ve shown is we can beat some of the most sophisticated hedge funds in the world with this by three or 400 basis points a year through efficiency.
Andrew Beer: But then I can also deliver it in something that my sister can own.
Barry Ritholtz: So to wrap up, people who are concerned about correlations just becoming one in any sort of crisis and want diversification should consider managed futures exposure. And the most efficient, least costly way to do that is through an ETF like DBMF, by Andrew Beer and DBI. I’m Barry Ritholtz, you’re listening to Bloomberg’s At the Money.
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