Invesco Plans Long/Short Global Futures ETF
QQQ manager expands into managed futures as alternative investment strategies gain popularity.
Invesco, which manages $571.7 billion in 228 U.S. ETFs, is aiming to launch a managed futures ETF that would mark the investing giant's entry into the increasingly popular alternative investment arena.
The Invesco Managed Futures ETF will take long and short positions in assets in more than 50 global markets, including stock indices, bond indexes, commodity indexes and currencies, according to a recent Securities and Exchange Commission filing.
The actively managed fund from Atlanta-based Invesco, which manages the $307.7 billion Invesco QQQ Trust (QQQ), aims to capitalize on price trends across global markets, focusing on both upward and downward market movements, according to the filing.
The filing comes as investors increasingly seek out managed futures strategies for portfolio diversification amid volatile markets. For example, the IMGP DBi Managed Futures Strategy ETF (DBMF) has accumulated nearly $1.3 billion in assets under management since its 2019 launch, including $609.4 million in net inflows over the past year.
The fund's managers aim "to identify price trends and relationships across global markets and systematically execute long or short positions in derivative contracts based on these trends,” according to the filing.
The fund will invest up to 25% of its total assets in a wholly owned Cayman Islands subsidiary to gain exposure to commodity-linked derivatives, as stated in the filing. The subsidiary will follow the same investment policies as the fund while also investing more extensively in commodity markets than the fund itself can under U.S. federal tax laws, the filing said.
Managed Futures Gain Momentum
Invesco’s planned entry follows similar moves by other major asset managers, with BlackRock’s iShares also recently filing for a managed futures product, the iShares Managed Futures Active ETF.
These types of funds gained attention during previous market downturns, including the 2008 financial crisis, when managed futures strategies delivered positive returns while traditional assets declined.
The proposed exchange-traded fund will employ a systematic investment process designed to provide consistent volatility levels regardless of market conditions, according to the filing.
The fund’s expense ratio wasn't disclosed in the filing.