Bier challenges the standard description of managed futures as trend following or momentum. He argues that their strongest returns arise when they position early for a major change and the market subsequently validates that position.

The trend-following label can obscure the underlying behavior
Large gains come from identifying structural shifts early
Examples include gold, rising rates, dollar strength, and yen weakness
The strategy can reposition as evidence of change develops

“It's because they are early contrarian and right in a big way.”
Andrew Bier · 04:01

“this is one of those strategies that has proven its ability to reposition to take advantage of those big changes in the world.”
Andrew Bier · 04:40

#managed futures#contrarian#momentum#macro

Explainer· 3

Explainer01:45

Why the 60/40 Portfolio Lost Some of Its Diversification

Stocks and bonds supplied adequate diversification through much of the 2010s, but inflation changed their relationship. When both asset classes declined in 2022, investors discovered that bonds would not always protect equity exposure.

Stocks and bonds increasingly moved together after inflation returned
Both sides of 60/40 declined during 2022
A useful third exposure should have low correlation to both
Crisis-period positive returns matter more than an alternative label

“sixty forty worked for a long time, but now we need something else.”
Andrew Bier · 02:07

“It's generally something that is a low correlation to ideally to both stocks and bonds, and can also deliver positive performance when you need it…”
Andrew Bier · 02:13

#60/40#inflation#diversification#bonds

Explainer05:03

How Market Prices Reveal That the World Is Changing

Market participants act on private beliefs and information by buying and selling assets. A systematic strategy can examine movements across many markets to detect those distributed signals before the full story becomes conventional wisdom.

Portfolio trades embed investors' information and beliefs
Cross-market price moves can reveal structural change
Signals become stronger when related markets move coherently
Gold's advance is offered as one recent example

“people tend to act on it with their portfolios”
Andrew Bier · 05:24

“lots and lots of the price moves across lots and lots of different markets to pick up these kernels of information that's something big is…”
Andrew Bier · 05:32

#price signals#markets#information#macro trends

Explainer06:39

Why Investors Overlook a Battle-Tested Diversifier

Managed futures are often presented through technical discussions of quantitative models, derivatives, and large instrument universes. Bier believes this emphasis alienates investors who primarily want to know whether a strategy will improve portfolio growth and reduce anxiety.

Industry explanations often focus on technical machinery
Investor communication should start with portfolio outcomes
Complex language creates an adoption barrier
The managed-futures ETF category grew substantially after 2019

“I come at it from the perspective of why will this make my portfolio better?”
Andrew Bier · 07:06

“help to grow assets and help me sleep at night.”
Andrew Bier · 07:15

#investor education#managed futures#communication#adoption

Story· 1

Story11:37

The Investor Who Saw Inflation Coming but Still Bought Bonds

Bier recounts meeting an investor who agreed that inflation was returning but nevertheless sold stocks and bought bonds because a 60/40 benchmark required rebalancing. The story illustrates how a disciplined allocation rule can produce counterproductive trades when its assumptions no longer fit the regime.

The investor correctly anticipated inflation
Benchmark discipline still directed money into bonds
Stocks had outperformed bonds, triggering conventional rebalancing
A correct macro view did not translate into an adaptive portfolio

“I totally agree with you. I think inflation is coming back.”
Andrew Bier · 11:56

“I'm selling my stocks and buying bonds because he was benchmarked to sixty forty and stocks had gone up more than bonds.”
Andrew Bier · 12:02

#rebalancing#inflation#60/40#asset allocation

Q&A· 2

Q&A11:11

Why Managed Futures Handled 2022 Better Than the COVID Flash Crash

The COVID shock transformed markets in roughly three weeks, leaving limited time for a trend-responsive portfolio to reposition. The sustained inflation and rate shift of 2022 unfolded more gradually and created clearer opportunities across commodities, bonds, and currencies.

COVID was an unusually rapid regime change
The strategy preserved capital during the March 2020 decline
Sustained changes provide more time to establish positions
Managed futures gained while stocks and bonds both fell in 2022

“the world changed in three weeks basically”
Andrew Bier · 11:19

“when stocks and bonds were both down fifteen to twenty percent, of the strategy went up twenty percent overall”
Andrew Bier · 12:30

#covid#2022#inflation#crisis performance

Q&A15:48

Why DBMF Expects Little Capacity or Market-Impact Pressure

DBMF trades major futures markets rather than narrow or esoteric contracts. Bier says their depth keeps market impact close to zero and avoids the vulnerability of becoming a predictable forced seller when liquidity disappears.

The selected futures are among the world's deepest markets
Trading occurs in US-listed instruments
Liquid contracts support substantial strategy capacity
Esoteric positions can become costly to exit during stress

“these are the deepest and most liquid instruments that are traded globally”
Andrew Bier · 16:02

“our market impact is essentially zero.”
Andrew Bier · 16:09

#liquidity#capacity#futures#market impact

Frameworks in this episode

Big-Trade Replication

Core-and-Nimble Portfolio

Insights & moments

⚡Myth Buster· 1

Managed Futures May Be Early Contrarians, Not Simple Trend Chasers

✶Explainer· 3