Core Insights - Managed futures strategies are gaining traction as a viable investment option amid market pressures on stocks and bonds, particularly due to geopolitical tensions and inflation concerns [1][4][6] Group 1: Performance and Market Context - In 2022, managed futures strategies outperformed traditional asset classes, with a 20% increase while the S&P 500 Index fell by approximately 18% and the Bloomberg U.S. Aggregate Bond Index decreased by about 13% [2][3] - The current market environment, characterized by the U.S.-Iran war and potential stagflation reminiscent of the 1970s, has led investors to seek alternative sources of returns, making managed futures increasingly relevant [4][6] Group 2: Investment Structure and Accessibility - Managed futures ETFs, which collectively hold around $6.5 billion in assets, provide a more liquid and transparent structure for investors compared to traditional hedge fund strategies [4][5] - The iMGP DBi Managed Futures Strategy ETF has attracted approximately $1 billion in inflows this year, indicating strong investor interest [4] Group 3: Industry Trends and Future Outlook - Major asset managers such as BlackRock, Invesco, and Fidelity Investments have recently launched their own managed futures ETFs, signaling growing demand from retail investors [6][7] - The ETF industry is expected to introduce additional managed futures products, reflecting a trend towards diversification in investment strategies [6] Group 4: Complexity and Investor Considerations - Managed futures ETFs are more complex than traditional stock and bond investments, requiring investors to have a solid understanding of their mechanics and the ability to endure periods of underperformance [7][8] - A recommended allocation for investors considering managed futures strategies is between 3% to 5% of their overall market portfolio, complementing other asset classes like hard assets or infrastructure [9]

Core Insights - The iMGP DBi Managed Futures Strategy ETF (DBMF) has demonstrated strong performance during market volatility, particularly during the spike in the VIX to 52.33 in April 2025, which resulted in significant losses for most portfolios [2][4] - DBMF employs trend-following models to invest across various asset classes, aiming to provide returns that are independent of traditional equities and bonds, thus serving as a genuine diversifier [3] Performance Summary - Over the past year, DBMF achieved a return of 25.26%, significantly outperforming the S&P 500 ETF (SPY), which returned 16.54% [4][8] - Year-to-date in 2026, DBMF is up 8.05%, while SPY is down 0.23%, indicating that the current macro environment continues to favor managed futures strategies [5][8] Appeal for Retirees - DBMF offers a potential hedge against sequence-of-returns risk for retirees, as it can rise when equities fall, thus protecting early retirement withdrawals [4] - The fund has a dividend yield that can supplement income during drawdown periods, with a reasonable expense ratio of 0.85% for an actively managed alternatives strategy [6] Long-term Considerations - Over a five-year period, DBMF returned 53.12%, compared to SPY's 80.6%, highlighting that trend-following strategies perform better during market dislocations rather than calm bull markets [7]

Core Insights - Hedge funds and holding companies, traditionally exclusive, are now being approached by exchange-traded funds (ETFs) that are adopting similar investment strategies [2][3] Group 1: ETF Strategies - ETFs are increasingly packaging investments into liquid, retail-friendly products that replicate hedge fund strategies, including futures-based exposure and options overlays [2] - Issuers are launching multiple funds that mimic the holdings of renowned investors like Warren Buffett and hedge fund strategies from figures such as Bill Ackman and Stanley Druckenmiller [2] - VistaShares has introduced three funds in the past year, including the VistaShares Target 15 Berkshire Select Income ETF (OMAH), which uses covered calls to generate monthly income from the top 20 companies owned by Berkshire Hathaway [3] Group 2: Performance and Trends - The OMAH fund has a significant expense ratio of 0.95% and maintains Berkshire Hathaway as its top holding at 10% [3] - According to Adam Patti, the CEO of VistaShares, Berkshire tends to lag in momentum markets but rebounds in value markets, indicating a strategic positioning with the OMAH fund [4] - Funds that mimic hedge funds using trend-following strategies are gaining traction, with the iMGP DBi Managed Futures Strategy ETF (DBMF) and Simplify Managed Futures Strategy ETF (CTA) being notable examples, having $2 billion and $1.2 billion in assets respectively [4]

Core Viewpoint - Stifel projects a 9% upside for the S&P 500 in 2026 if the US economy remains stable, but warns of a potential 20% decline in the event of a recession [1][2] Economic Outlook - A recession is not the base case for Stifel or other major banks, with a 25% chance assigned to a downturn occurring next year [2] - The Federal Reserve has increased its growth forecast for 2026, indicating a more optimistic economic outlook [2] Labor Market Concerns - The labor market shows signs of instability, with rising unemployment and layoffs, which could lead to reduced consumer spending [3] - Consumer spending accounts for 68% of GDP, making its decline a significant concern for economic health [3] Stock Valuation Risks - Current stock valuations are historically high, with median pullbacks during recessions averaging 20% and average drops at 23% since World War II [4] - The S&P 500 is considered expensive, and P/E ratios may become critical in a downturn [4] Speculative Assets and Market Behavior - In the event of a bear market, speculative assets are expected to decline first, followed by the broader market [5] - A basket of seven highly-volatile stocks has already seen significant declines, indicating a shift in market sentiment [5] Defensive Investment Recommendations - Despite a positive base case for the S&P 500, Stifel recommends building hedge positions with defensive stocks [6] - Suggested funds for exposure to defensive assets include Consumer Staples Select Sector SPDR Fund (XLP), Invesco S&P 500 Low Volatility ETF (SPLV), JPMorgan Equity Premium Income ETF (JEPI), and iMGP DBi Managed Futures Strategy ETF (DBMF) [6]