DBi has launched Europe’s first exchange-traded fund (ETF) designed to replicate the performance of managed futures hedge funds – at a fraction of the cost – marking a significant milestone for the region’s liquid alternatives market, according to a report by the FT.
The launch comes amid a surge in investor interest in managed futures strategies. In the US, BlackRock recently entered the space with its own managed futures ETF, while industry giants Invesco and Fidelity have filed plans to introduce similar “trend-following” funds.
The Paris-listed iMGP DBi Managed Futures Fund R USD ETF is modelled after the largest US-listed ETF in the sector, the $1.1bn iMGP DBi Managed Futures Strategy ETF (DBMF). A London listing is expected to follow. The ETF carries an expense ratio of 0.75%.
“Managed futures ETFs are becoming a major force in the US,” said Andrew Beer, co-founder of DBi and co-manager of the fund. “It’s one of the few alternative strategies with clear diversification benefits.”
Managed futures strategies have traditionally been dominated by hedge funds, which charge higher fees and limit access to institutional investors. As of the end of 2024, CTAs managed $339bn in assets, according to BarclayHedge. However, asset growth has stalled over the past decade.
Instead, the rise of mutual funds and ETFs has eroded hedge fund dominance. US-domiciled managed futures mutual funds now hold $15.2bn, a 20% increase since 2020, while European counterparts manage $13.2bn, according to Morningstar.
AQR, Winton, Man AHL, Pimco, and Deka are among the major players offering systematic trend-following UCITS mutual funds in Europe.
Managed futures ETFs – offering greater liquidity and lower fees – have seen explosive growth, with US assets surging tenfold since 2020 to $2.9bn across nine funds.
JPMorgan previously operated a similar ETF in Europe but closed it in 2020. The only comparable alternative currently available is Kronos Strategy ETP Securities, which focuses solely on US equity futures.
DBMF seeks to replicate the pre-fee performance of a representative basket of managed futures hedge funds—including those operated by AHL and AQR. Using an algorithm, the ETF estimates CTA positioning based on daily performance and executes trades via futures contracts tied to gold, oil, the yen, the euro, US Treasuries, and the S&P 500.
Since inception, DBMF has generated an average annual return of 7.3%, outperforming the SG CTA Index (5.3%), which is weighed down by higher hedge fund fees.
