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The Newest Managed-Futures Medalist

Josh Charlson, CFA

Josh Charlson: Today, we'll be talking about Natixis ASG Managed Futures Fund (AMFAX). It's the newest medalist in our managed-futures category. We recently upgraded it from Neutral to Bronze.

Like other managed-futures funds, this fund uses quantitative models to capture trends or momentum across various asset classes, such as currencies, commodities, equities, and fixed income.

One of the things we like about this fund is that it has an experienced management team out of Alpha Simplex Group--a firm that was founded by Andrew Lo. He's a professor at MIT, and he's well known for his adaptive-market hypothesis. They use parts of that hypothesis, incorporating it into their models. They use a mix of fairly straightforward and more-complex models.

Performance has been really good for this fund recently; it outperformed the category by a lot in 2014. However, we caution investors to recognize that it also has more volatility than a lot of its competitors.

We also caution investors to be aware of performance-chasing in managed futures. You should be really sure that you want a managed-futures allocation because performance can change a lot in managed futures and not always according to expected patterns.

If you are interested in using a managed-futures fund, we would advise looking at this fund. We especially like the fact that it has lower fees than a lot of competitors in this high-priced category.