Bonds have been dead money for a decade. This is the premise. Not a hypothetical. Not a warning. The actual pitch hedge funds are making to separate you from your capital.
The solution? Managed futures. Because when your bonds aren't performing, what you really need is a strategy that costs more and requires you to explain what the f*ck a managed futures fund is at Thanksgiving dinner.
Here's what managed futures means: a guy with a Series 7 license uses algorithms to trade commodity futures contracts while collecting 2 and 20 on your money. He's trend-following. He's market-neutral. He's got exposure to volatility across uncorrelated asset classes. He's also probably named Preston.
The pitch goes like this. Bonds delivered nothing. Managed futures delivered something. Therefore you should pay exponentially higher fees for something instead of holding nothing. This is the kind of logic that gets portfolio managers promoted.
Nobody mentions that the last decade was literally the worst environment for bonds in modern history. Rates went from zero to five percent. Duration got murdered. Of course bonds sucked. Comparing anything to the worst-performing asset class of the last ten years is not a strategy. It's a sales tactic.
But retail loves a narrative. Dead money sounds scary. Managed futures sounds sophisticated. The combination makes people feel like they're doing something. They're not doing something. They're paying someone else to do something while they wait to see if that something works.
The funniest part? Bonds might actually outperform managed futures over the next decade. Rates are high now. Duration works both ways. But that would require patience and a basic understanding of how fixed income works, which is apparently too much to ask.
You spent ten years in bonds and got nothing, so now you're chasing the thing that worked while bonds didn't—a strategy that has never failed except every single time retail discovers it.
Photo by Markus Winkler on Unsplash
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