This is a managed futures strategy ETF that captures price trends in commodity, currency, equity index, and interest rate futures and takes long and short positions together. It is run on a rules-based quantitative model and seeks positive returns regardless of market direction.

It suits investors who want to add a low-correlation alternative asset to a portfolio dominated by stocks and bonds to improve diversification.

It is an ETF managed by WisdomTree using an active management approach.

It allocates a significant portion of net assets to the managed futures strategy, taking long positions in uptrends and short positions in downtrends across commodity, currency, equity index, and interest rate futures. It is a non-diversified active ETF that aims for returns with low direct correlation to the performance of broad stock or bond markets.

• Follows trends in futures across multiple asset classes in both long and short directions
• Alternative investment exposure with low correlation to stocks and bonds

Assets under management (AUM) stand at $260.9M, and the total expense ratio is 0.66% per year.

Its low correlation with traditional assets is a strength, but performance can lag in sideways markets where trends frequently reverse.

Given the nature of trend-following strategies, performance tends to stand out when the market has a clear direction and to lag in periods when prices rise and fall repeatedly without direction. Short-term results depend on the strength of trends in each asset class.

Interest in it as a diversifier tends to rise when stocks and bonds weaken together, while investor attention tends to fade somewhat when traditional assets are strong.

Its strength is diversification from low correlation with traditional assets, while its weaknesses are underperformance in sideways markets and a relatively high fee.

Among the alternative and income products shown together in the table, DBMF follows the same managed futures trend-following approach and is a direct comparison. PFFA and PREF are preferred stock income products, AMZA is an MLP income product, and CEFS is a closed-end fund bundle, so their asset classes and fee structures differ greatly. Direct trend-following substitutes include KMLM, CTA, and FMF, and variants such as RSBT, which combines equities with bond and trend strategies, can also be considered.

Here are the points to review before investing in WTMF. Because it is an alternative investment product, it is important to fully understand in advance its return pattern, which differs from traditional assets, and the cost structure of futures-based management.

Performance can lag in sideways phases where trends frequently reverse, and because it is a non-diversified structure using futures and derivatives, its return pattern differs from that of a typical index ETF. Investors should approach it with an understanding of its role as a diversifier.

It is worth considering as a diversifier for investors who want to add a low-correlation alternative asset to a portfolio centered on stocks and bonds. However, given its sideways-market weakness and its cost and structural complexity, it is reasonable to use it as a supplementary allocation.