I have the 3xGTAA $DE000LS9U6W1 (-0,23 %) from @Epi with the iMGP DBi Managed Futures ETF $DBMFE (+0,62 %) compared.

Since both products are trend followers, I assumed that they would behave in roughly the same way, with the difference that the 3xGTAA is probably 3x as volatile.

It turned out to be 4 to 5 times as volatile. 😅

(looking at 1 year, unfortunately both products have not been around that long)

So if the volatility of 3xGTAA is too high for you, but you still want to have a trend-following strategy in your portfolio, you can simply add $DBMFE (+0,62 %) to reduce the vola.

Possibly, you can even rebalance in strong dropdowns... just a thought. 😘

I don't have the time to write a detailed explanation right now, but I don't want to withhold the following from you, so I'll keep it short, but I will link to sources that you can browse through if you are interested in the topic.

There is a relatively new ETF that attempts to track the mean value of various trend following hedge funds. Also known as managed futures.

$DBMFE (+0,62 %)

Advantage, compared to classic hedge funds:

-Lower costs

-Flexible trading

-no manager risk

-no high capital thresholds, anyone can invest

Why should you care?

Managed futures have almost no correlation with the stock market and are often referred to as "crisis alpha", as they tend to perform better when there is a clear upward or downward trend.

To put it simply:

When the market is doing really well or really badly, managed future strategies perform best, but have problems in "kangaroo markets".

Who is this interesting for?

For anyone who wants to smooth out volatility in their portfolio or is looking for a source of return that is uncorrelated to equities.

Please remember that uncorrelated and negatively correlated are two different things. 😅

Managed futures are not voodoo and have been well researched in the academic literature since the 1980s.

Here is a recent study:

https://people.duke.edu/~charvey/Research/Published_Papers/P140_The_best_of.pdf

(at some point I'll link a porno, nobody reads the sources anyway ;)

Here is a summary that is better than anything I could ever write:

https://www.imgp.com/documents/iMGP_The_Case_for_Managed_Futures_in_an_Investment_Portfolio.pdf

Still, please treat with caution as it comes directly from DBi and they want you to buy the ETF.

For investors in Austria:

CAUTION! At the moment it is still a non-reporting fund!

If you don't know what it is, then stay away or you will get a nasty surprise from the tax office at the beginning of the year.

Hedge funds in an ETF wrapper, what do you think?

😘