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.
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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 mimic hedge funds. They 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.