The 60/40 portfolio had one job. Stocks for growth. Bonds for ballast. For the better part of four decades, that two-legged construct delivered — not because it was brilliant, but because falling interest rates and negative stock-bond correlation made it almost impossible to fail. That tailwind is gone. And the advisors who haven't rebuilt their portfolios around that reality are having very different client conversations than the ones who have.
That is the quiet, persistent thesis running through every answer Paisley Nardini gave on a recent episode of Insight Is Capital1. Nardini, who has spent her career at the intersection of multi-asset portfolio construction and real-world risk management — from PIMCO to Invesco to her current role at Simplify — brings a rare combination of institutional rigor and street-level clarity to the alternatives conversation. Her message is neither alarmist nor academic. It is practical, data-backed, and increasingly urgent.
The Stat She Rechecked Ten Times
The conversation opens with a number that stops the room. Nardini walks through the long-term performance of managed futures at the benchmark index level — not the high-octane alpha strategies, just the Société Générale CTA Index — measured against the Bloomberg Aggregate Bond Index across every trailing period from five to twenty-five years.
"Here's a fascinating stat that I pulled up like ten times because I was like, I must be doing the math wrong," she says. "Trend following has outperformed bonds in all of those periods. When we're talking about not removing or replacing your bonds but diversifying your bonds into a strategy like managed futures that has consistently delivered low to no correlation to stocks and bonds — so like a true ballast, a true diversifier — and has also outperformed bonds on a total return perspective. What are we talking about here?"
It is a pointed question. And the answer, Nardini argues, keeps getting buried under a behavioral problem that has nothing to do with the data.
The Behavioral Trap
The managed futures adoption problem is not an information problem. Advisors have the charts. They've sat through the presentations. They understand, at an intellectual level, that the strategy works. What stops them is the client conversation that happens during an equity melt-up when the managed futures line item sits flat.
"When you have a period where equities melt up and equities are doing exceptionally well, and then your client points to that one line item — let's just say it is managed futures for the quarter — why was the return flat when equities were up six percent?" Nardini explains. "And so as an advisor you understand it. But if you can really share some of these profound, impactful historical data points of outperformance versus bonds, consistently low correlated, saving your portfolio in a period like the first quarter of 2026 or the entire calendar year for the most part of 2022 — just smoothing that ride is what these diversifiers are doing."
The irony Nardini surfaces is precise: the advisor who added managed futures before Q1 2026 didn't have a hard client conversation. They had an easy one. They could point to the one line item that was working while everything else muddled. The discomfort isn't in owning the strategy. It's in not owning it at exactly the moment when it would have mattered most.
Commodities, Gold, and the Heterogeneous Alternative
Nardini is equally direct about the commodity allocation gap in most advisor portfolios. The last decade of deflationary oil and gas prices made passive commodity index exposure deeply unsatisfying — and many advisors drew the wrong conclusion. "If you're in just a passive commodity index type fund, oil and gas have been anywhere from twenty-five to thirty-five percent of that allocation," she notes, making the case for dynamic, active commodity exposure that can adapt to an increasingly volatile supply-demand environment.
Gold's recent behavior adds another layer of complexity. What many investors assumed was a safe haven became a momentum trade in 2025, driven by central bank accumulation and retail pile-on — and then a liquidity vehicle during the geopolitical shock of early 2026, selling off at precisely the moment it was supposed to hold. The lesson, Nardini argues, is that single-commodity exposure is not diversification. It is concentration with a different label.
The Democratization of Institutional Tools
Perhaps the most practically important point in the conversation is one that still hasn't fully landed with the advisor community: the access problem has been solved. The strategies that were once available only to institutions and ultra-high-net-worth investors through lock-up vehicles with steep fees are now sitting in daily-liquid ETFs at thirty to fifty basis points. No K-1s. No lock-ups. No minimum commitments that put them out of reach for the typical client portfolio.
Simplify's own CTA ETF — which deliberately excludes equity and FX exposure to maximize its diversification purity — carries a Morningstar five-star rating and has produced what Nardini calls a mirror-image return pattern against the 60/40 portfolio since its 2022 inception. "When your 60/40 sells off, CTA goes up and vice versa," she says. "It's a mic drop moment. You're telling me that you're providing the diversification. But show me in practice that that's exactly what you're delivering."
On sizing, Nardini is concrete: anything less than ten percent at the total portfolio level is unlikely to move the needle in a real dislocation. Most advisors are starting from zero. Getting to ten percent, sourced primarily from the bond allocation, is the first step — and it doesn't require throwing out what's already working.
3 Key Takeaways for Advisors and Investors
1. The data has already made the case — the barrier is behavioral, not analytical. Managed futures at the benchmark index level has outperformed bonds across every trailing period from five to twenty-five years. Advisors who haven't acted don't need more information. They need a reframe: the uncomfortable client conversation happens when you don't own the strategy during a crisis, not when you do.
2. Liquid alternatives are no longer an institutional privilege. Daily-liquid managed futures ETFs now exist at fees as low as thirty basis points, with no K-1s and no lock-ups. The access barrier that once kept these strategies out of retail portfolios is gone. The only remaining barrier is the advisor's willingness to have the conversation before the next dislocation makes it unavoidable.
3. Ten percent is the floor, not the ceiling. Allocations below ten percent of the total portfolio are unlikely to provide meaningful protection during a correlation crisis. For most advisors, that allocation should be sourced from bonds — which frees up income potential while adding genuine ballast — not from equities, preserving the portfolio's long-term growth engine intact.
Footnote:
1 "Most Investors Have No Idea Their Portfolio is Missing This." AdvisorAnalyst, 1 May. 2026.
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