Managed futures ETFs have been proposed as an alternative to bonds in a portfolio, because bonds sometimes correlate highly with equities. The managed futures instruments do trend following with derivatives, and may provide good negative correlation with equities, have lower volatility, and generate higher return. [Here](https://testfol.io/?s=0vkpeDtG6iQ) is a backtest comparing a 60/40 (equities/bonds) portfolio with various mixtures of managed futures ETFs. Reducing the typical bonds allocation by half, and using the other half in managed futures might be a good strategy.
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Managed futures ETFs have been proposed as an alternative to bonds in a portfolio because bonds sometimes correlate highly with equities. The managed futures instruments attempt trend following with derivatives, and may provide a good negative correlation with equities, reduce volatility, and generate higher return. [Here](https://testfol.io/?s=0vkpeDtG6iQ) is a backtest comparing a 60/40 (equities/bonds) portfolio with various mixtures of managed futures ETFs. Reducing the typical bonds allocation by half, and using the other half in managed futures might be a good strategy.