We found it quite interesting that Wisdom Tree was trumpeting its release of a new ETF last week as the first ever managed futures ETF (you can find it on the middle/left/bottom of their home page  www.wisdomtree.com), given that:

1. It doesn’t invest in ‘Managed Futures’ at all, and instead merely follows the S&P Diversified Trends Index.
2. Rydex launched a mutual fund – RYMFX (an ETF in all but name) four years earlier following the exact same methodology.

We’ll likely do a full newsletter on this in the coming weeks discussing the potential for front running this, the problems with it fooling retail investors into believing they are investing in managed futures, and more…. but for now you can chew on the correlations between the Diversified Trend Indicator and the three main managed futures indices below.

In short, this is an ETF designed to track an asset class which has no technical exposure to that asset class and a statistically insignificant correlation to that asset class.  Buyer beware!