With stocks and bonds both under pressure and oil back above $100, investors are looking for alternative ways to navigate one of the most challenging market environments in years.

As the US–Iran war fuels volatility and raises fears of stagflation, a lesser-known strategy is gaining attention again: managed futures.

A Strategy Built for Turbulent Markets

Managed futures strategies, often used by hedge funds, focus on trading trends across assets like commodities, currencies, and bonds rather than relying on traditional stock or bond performance. They are designed to:

  • Go long or short depending on market direction
  • Adapt to shifting macro trends
  • Perform during periods of volatility

That flexibility is becoming attractive again as markets struggle.

Why Interest Is Rising Now

The current environment looks similar to 2022, when:

  • Stocks and bonds both declined sharply
  • Oil prices surged
  • Managed futures strategies delivered strong gains

In that year, while the S&P 500 fell and bonds dropped, these strategies returned around 20%, highlighting their potential during market stress. Today, the same conditions are reappearing:

  • Rising inflation risks
  • Geopolitical uncertainty
  • Unstable interest rate outlook

Big Players Are Moving In

The growing interest is also reflected in the industry. Major asset managers like: BlackRock, Invesco, Fidelity

have recently launched or expanded managed futures ETFs, signaling increasing demand. Although the space is still relatively small, with about $6.5 billion in assets, it is seeing steady inflows.

Not a Simple Investment

Despite the growing popularity, experts warn that these strategies are more complex than traditional investments. They can:

  • Perform well during volatile periods
  • Underperform in stable markets

Because of this, they are often recommended as a small part of a portfolio, typically around 3% to 5%, rather than a core holding.

With stocks and bonds falling at the same time, investors are being forced to rethink traditional strategies. Managed futures are emerging as one option in a market where: volatility is high, uncertainty is rising, and diversification matters more than ever.

Related: Almost everything is going wrong for markets right now

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.