IALT vs. DBMF: What the Top Alternatives ETFs Can Do for Portfolios

Alternatives ETFs: While not necessarily as exciting as they may have been, there is much to be said for one of the more innovative ETF segments. The top alternatives ETFs offer strategies blending hedge fund ideas and quantitative tools, adaptability for downturn and upside chasing flexibility for booms. They can still deliver for portfolios — so which stand out? The duel between the two of the largest by AUM illustrates just how much, leaning on active investing strengths.

Key Takeaways:

• The top alternatives ETFs offer powerful, adaptable strategies, using the ETF wrapper’s key strengths.
• Two of the largest by AUM — DBMF and IALT — have spiked in size and flows this year.
• The pair may present durable returns, too, beating their category average on ETFDB.

The iMGP DBi Managed Futures Strategy ETF (DBMF) and the iShares Systematic Alternatives Active ETF (IALT) sit at $5 billion and $7.8 billion, respectively. DBMF recently crossed that $5 billion threshold, charging an 85 basis point (bps) fee. IALT meanwhile has seen a more-than $7 billion AUM increase this year alone, having just launched in December last year.

IALT actively invests in both developed and emerging markets using quant models and proprietary ranking. It looks for long-term returns in equities and fixed income, as well as commodities and currencies.

IALT looks for mispriced opportunities and invests across market cap and credit quality. It also uses derivatives as needed based on its managers’ vision. That has helped the fund from iShares return a healthy 14% YTD. That start to its life as a fund indicates its approach may have staying power.

DBMF, meanwhile, has seen its AUM grow almost $3 billion since the start of this year, per ETF Database data. The strategy looks to emulate the performance of a set of CTA hedge funds, allocating weights to derivatives chosen by the fund’s managers.