Managed Futures Performance in a Volatile Market Environment: Momentum-Driven Opportunities in September 2025

Image: A line graph illustrating the performance of managed futures (+3.41% in September 2025) compared to U.S. Stocks (+3.56%), World Stocks (+3.62%), and bonds (+1.11%) during the same period. The x-axis represents time (August–September 2025), while the y-axis shows cumulative returns. A shaded area highlights the volatility spikes caused by tariff uncertainties and Fed policy shifts.

Visual: Line chart comparing monthly returns of managed futures, U.S. equities, global equities, and bonds in September 2025. Includes annotations for key events: Fed rate cuts, tariff extensions, and small-cap/value outperformance.

In September 2025, managed futures emerged as a standout performer in a volatile market landscape, surging 3.41% for the month and marking their best return of the year, according to RCM Alternatives. This momentum-driven rebound not only reduced year-to-date losses from -7.85% in July to -2.85% but also underscored the asset class's resilience amid macroeconomic turbulence. The performance aligns with the core thesis of trend-following strategies, which thrive in environments characterized by sharp price movements and divergent asset-class behavior, as shown by the AlphaSimplex Managed Futures strategy.

Market Conditions: A Perfect Storm of Volatility and Opportunity

The September rally was fueled by a confluence of factors. The Federal Reserve's anticipated 25 basis point rate cut, part of a broader easing cycle, injected liquidity into equity markets and bolstered sectors like small-cap and value stocks, a dynamic discussed in the AlphaSimplex Managed Futures strategy. Meanwhile, geopolitical uncertainties-such as extended tariff deadlines between the U.S. and EU and new levies on Canadian goods-created dislocations in global trade, amplifying price swings in commodities and currencies, as described in the Morningstar outlook. These conditions proved fertile ground for managed futures, which leverage algorithmic and discretionary systems to capitalize on emerging trends, a point highlighted by RCM Alternatives.

Traditional assets also experienced significant shifts. U.S. and World Stocks rose 3.56% and 3.62%, respectively, while the Vanguard Total Bond Market ETF gained 1.11%, as noted in a Morningstar managed-futures article. However, the outperformance of small-cap and value stocks-up 4.58% and 5.05% in August-highlighted a broader repositioning toward sectors poised to benefit from declining interest rates, which the Morningstar outlook also discussed. Managed futures, with their low correlation to traditional equities and bonds, provided a unique complement to these strategies, offering diversification during periods of market fragmentation, a theme underscored by the Morningstar managed-futures article.

Momentum Strategies: The Engine Behind Managed Futures

Trend-following strategies, central to managed futures, rely on identifying and amplifying directional price movements. In September, these strategies capitalized on sharp swings in energy prices, currency crosswinds, and equity index rotations, as described by the AlphaSimplex Managed Futures strategy. For instance, the AlphaSimplex approach, which employs a pure trend-following methodology, demonstrated how experienced teams can adapt to shifting dynamics, such as the Fed's dovish pivot and tariff-related distortions.

Critically, managed futures' ability to go long or short across asset classes allowed them to profit from both rising and falling markets-a flexibility that traditional long-only portfolios lack. This duality became evident as investors navigated conflicting signals: optimism over rate cuts versus pessimism about tariff-driven GDP slowdowns, a tension explored in the Morningstar outlook.

A Comparative Edge: Managed Futures vs. Traditional Assets

While traditional assets delivered positive returns in September, managed futures outperformed due to their dynamic risk management and global exposure. For example, the 3.41% gain in managed futures exceeded the 1.11% return of bonds and matched the equity indices' performance, a comparison detailed in the Morningstar managed-futures article. This edge is particularly valuable in volatile environments, where correlations between assets often break down.

Moreover, managed futures' performance in September reinforced their role as a crisis hedge. Historically, trend-following strategies have generated alpha during market dislocations, such as the 2008 financial crisis and the 2020 pandemic sell-off, observations echoed by the AlphaSimplex Managed Futures strategy. The September 2025 data suggests this pattern may be repeating, as managed futures navigated tariff-driven uncertainties and Fed policy shifts with relative agility, a point RCM Alternatives emphasized.

Looking Ahead: Strategic Implications for Investors

As we enter Q4 2025, the momentum built in September positions managed futures as a compelling addition to diversified portfolios. Analysts at RCM Alternatives note that the asset class's adaptability-rooted in its ability to respond to both macroeconomic and geopolitical shocks-makes it well-suited for a world of persistent volatility. However, investors must remain cognizant of the inherent volatility of trend-following strategies, which can underperform during choppy, range-bound markets, as the Morningstar managed-futures article cautions.

For now, the September 2025 performance serves as a case study in how managed futures can transform uncertainty into opportunity. As the Fed continues its easing cycle and global trade tensions evolve, the ability to harness momentum across asset classes may prove increasingly vital for investors seeking both growth and stability.