Bonds have underperformed for years

Andrew Beer, co-founder of DBi, told CNBC that bonds have been dead money for the entire decade. He argues investors should reconsider traditional 60/40 portfolio allocations.

“[Bonds have] been dead money for the entire decade”

Managed futures offer an alternative

Beer suggests managed futures, a hedge fund strategy, could counterbalance stocks better than bonds during volatility. These ETFs can go long and short across global markets to position early against turbulent events.

“You want something that has low correlation to both stocks and bonds, and something that will do well in crises”

Beer's ETF shows strong performance

The iMGP DBi Managed Futures Strategy ETF, which Beer helps manage, replicates leading managed futures hedge funds in a low-cost, liquid format. It is up almost nineteen percent so far this year.

Experts warn against replacing bonds

Nate Geraci, president of NovaDius Wealth Management, argues managed futures should fit within a diversified portfolio that includes stocks and bonds, not replace bonds entirely. Investors must understand how alternatives interact with existing holdings.

“[Alternatives] fit in the sleeve of a well-diversified portfolio that includes stocks and bonds”

Balance requires long-term perspective

Geraci notes managed futures can outperform during volatile markets but may underperform in other periods. He emphasizes diversification and letting alternative strategies work over the long term.

“You have to let that work out over the long-term”