“When the global markets plummeted after Lehman Brothers declared bankruptcy in September last year,” the New York Times reports, “a handful of alternative investments remained stable or even made money for investors.” Among that handful were managed futures.

David M. Darst, chief investment strategist of Morgan Stanley Smith Barney, calls managed futures “financial Tylenol.” “Managed futures tend to do well during periods of great market volatility,” he said.

By way of example, Mr. Darst pointed to the period from the beginning of 2000 until the end of 2002, when the technology bubble burst and the economy was last in a recession. During that three-year period, managed futures gained about 22 percent on average, while the Standard & Poor’s 500-stock index fell roughly 38 percent, he said.

More recently, from September 2007 until the present, managed futures have gained around 20 percent on average, while the S.& P. 500 index has lost about 30 percent, according to Lipper, the fund tracking firm.

Mr. Darst said that one advantage managed futures had over hedge funds was liquidity. Some managed futures funds allow investors to take their money out monthly, while hedge funds typically have quarterly or annual redemptions. Mr. Darst said that managed futures funds could do this because the futures traded on public exchanges, while hedge funds often owned illiquid assets.

» Follow us on Facebook and Twitter. Join our eNews