Masters in Business: At the Money – Seeking Uncorrelated Returns

Host: Barry Ritholtz (Bloomberg)
Guest: Andrew Beer, Founder, Dynamic Beta Investments
Date: April 8, 2026

Episode Overview

In this episode, Barry Ritholtz sits down with hedge fund veteran Andrew Beer to explore the pursuit of “uncorrelated returns” through managed futures strategies. As traditional 60/40 portfolios face new risks in a post-inflation era, Beer explains why managed futures remain one of the few reliable diversifiers—albeit one that’s long been overlooked by mainstream investors. They delve into the mechanics of managed futures, the logic behind Beer’s ETF (DBMF), and its practical advantages for everyday investors.

Key Discussion Points & Insights

Why Diversification Has Changed

• Paradigm Shift in 60/40 Portfolios:

  • Andrew Beer observes that since inflation re-emerged, "stocks have tended to move up and down with bonds and did not protect in 2022" [04:10], undermining the long-held belief in their negative correlation.
  • The wealth management industry is "looking for something else" that actually diversifies [04:10].

• Managed Futures as a Solution:

  • Beer: Managed futures have been “battle tested” for 50 years and “did well during the dot com crisis, did well during the GFC... was up 20% during 2022” [04:10].
  • The challenge: Making these strategies accessible, affordable, and understandable for everyday investors [04:10].

Problems with Other “Diversifiers”

• Skepticism Toward Private Credit/Equity:
  • Barry: “Debt and credit are going to move if we have a recession... Is there any reason to think that sort of diversifier is not going to do the same thing?” [05:37]
  • Beer: Managed futures gain when they are “early, contrarian and right in a big way,” identifying and acting on market shifts rather than just following trends [06:08].

Managed Futures – Explained Without the Jargon

• How the Strategy Works:

  • Beer offers a plain-English definition: Managers in this space “look at lots and lots... of price moves across lots... of different markets to pick up these kernels of information that something big is changing” [07:34].
  • Real-world application: Being “early” on inflation, long gold during its “melt up,” and other such prescient trades.

• Benefit for Investors:

  • Beer: “What’s much more interesting for... end investor[s] is... why should somebody... be glad that it’s there? Help to grow assets and help me sleep at night” [09:10].

Why Managed Futures Are Overlooked

• Best Diversifier No One Buys:

  • Beer: “I’m convincing people, I’m changing hearts and minds one at a time.” [09:10]
  • He notes that the space is dominated by “technical” and “quantitative” talk, which can alienate average investors.

• ETF Growth:

  • In 2019, managed futures ETFs had just $300 million AUM; by 2026, “maybe close to 5 billion” [09:10].
  • Beer predicts in “five years... you’ll see a typical 3–5% portfolio allocation to managed futures” [09:10].

The Case for Replication via ETF (DBMF)

• The Traditional Problem:

  • The managed futures space is “just too damn expensive” due to management fees, incentive fees, and frequent trading in complex portfolios [11:09].
  • Many traditional funds are “Rube Goldberg like,” trading “hundreds of times a day” [11:09].

• Beer’s Solution:

  • By replicating the signal with a “simple portfolio that is much more liquid, we can save hundreds of basis points” and pass savings to clients [11:09].

Performance in Crisis Periods

• Dot-Com, GFC, COVID, and Inflation:
  • Strategy “preserved capital” during COVID’s March 2020 crash; shined most in a drawn-out crisis like 2022’s inflationary shock, where DBMF “went up a bit more” than 20% as stocks and bonds fell [13:41].
  • Common mistake: Allocators stick to rigid models, missing out on inflection points (e.g., selling stocks/buying bonds in 2022 despite inflation signals) [13:41].

What DBMF Actually Trades & How

• Simple and Effective Instrument Set:

  • DBMF uses only 10 futures instruments:
    • Equities: S&P 500, Non-US Developed Markets, Emerging Markets
    • Fixed Income: 2-, 10-, and 30-year Treasuries
    • Commodities: Gold and Oil (“Other precious metals will track gold”) [16:13].
    • Currencies: Euro and Yen (always against the dollar) [16:18].

• The “Big Trade” Philosophy:

  • Beer: “It’s the big trade, stupid. In 2022, to be up 20%, you want to be long crude oil... short the yen... and short Treasuries” [16:40].
  • Claims replication can often “beat hedge funds at their own game” in ETFs, delivering most of the return for less [16:40].

Addressing ETF Capacity and Liquidity

• No Capacity Issues:

  • Instruments used are the “deepest and most liquid” globally, “market impact is essentially zero” [18:30].
  • Simplicity wins: Trading esoteric or illiquid instruments backfires during volatile periods [18:30].

• Efficiency Advantage:

  • Simpler, more liquid approach outperforms by “3 or 400 basis points a year” relative to hedge funds [18:30].
  • “My sister can own” the ETF—full transparency on positions [18:30].

Notable Quotes & Memorable Moments

• On the Change in Diversification:

  • “Diversification has changed a lot this decade. In the 2000s and 2010s, you really didn’t need anything other than stocks and bonds. But things have changed since inflation started to come back.”
    — Andrew Beer [04:10]

• On Managed Futures’ Key Advantage:

  • “When the strategy generates those kinds of returns, it’s because they are early, contrarian and right in a big way.”
    — Andrew Beer [06:08]

• On Simplicity vs. Complexity:

  • “Complexity often has a real cost. It sounds great to say I’m trading some esoteric market... When things go bad... you are making [other traders’] year.”
    — Andrew Beer [18:30]

• On ETF’s Accessibility:

  • “I can give you 10 [percent] with a simpler and much more efficient portfolio and give you eight or nine and put it into an ETF where you can see every single position every single day.”
    — Andrew Beer [16:40]

• On Portfolio Construction:

  • “80% [success] isn’t bad, which is why that should be 95% of your portfolio. 20% of the time, the world changes... So that’s what it’s trying to solve from a portfolio perspective.”
    — Andrew Beer [11:58]

Important Timestamps

| Timestamp | Segment/Insight | |------------|-------------------------------------------------------------------------------------------| | 04:10 | Why 60/40 isn’t enough – the search for something else | | 06:08 | How managed futures make money in major crises | | 07:34 | Trend following explained in plain terms | | 09:10 | “The best diversifier no one buys”—why managed futures is overlooked | | 11:09 | The specific problem DBMF solves versus traditional managed futures funds | | 13:41 | Strategy’s performance in historic market downturns | | 15:40 | The actual markets/assets traded in DBMF | | 16:40 | “It’s the big trade, stupid”—the focus on a few key markets for major moves | | 18:30 | ETF’s liquidity, lack of capacity issues, and simplicity over complexity | | 19:34 | Summary of why ETFs like DBMF are the efficient way to get managed futures exposure |

Episode Takeaways

• Managed futures remain one of the rare, battle-tested diversifiers—even as traditional asset class correlations rise.
• ETFs like DBMF now let every investor access what was once the domain of complex, costly hedge funds.
• Simplicity, efficiency, and transparency provide a significant advantage over traditional active management in this space.
• Allocators should carve out a modest allocation to strategies able to thrive when “the world changes,” rather than relying solely on stocks and bonds.

Compiled and summarized in the original language and tone of the speakers. This summary captures the most salient insights, quotes, and turning points for investors seeking actionable, real-world perspective on uncorrelated strategies.