Across a broad institutional survey, managed futures and trend following work out at well under 1% of the average portfolio. Institutions that hold the strategy deliberately publish targets of 6% and 10%. Both readings can be correct, because one averages across every investor and the other describes adopters.
What share of institutional portfolios goes to managed futures?
Natixis Investment Managers' 2025 Institutional Outlook surveyed 500 institutional investors in 28 countries in late 2024. Alternatives made up 17% of the average portfolio, and managed futures and trend following made up 4% of the alternatives allocation. Natixis showed the same 4% in its projected and target mixes. [1]
Multiplying the two averages gives about 0.68% of the total portfolio. That is a product of reported averages, not a measured average holding: the survey does not publish the weighting needed to calculate one directly. [1]
Are institutions planning to change it?
Most plan to hold steady. In the same survey, 19% of institutions planned to increase managed futures, 71% to maintain and 10% to decrease. Plans for other alternatives were more active. [1]
| Category | Increase | Maintain | Decrease |
|---|---|---|---|
| Infrastructure | 47% | 48% | 5% |
| Private equity / venture | 45% | 45% | 10% |
| Hedge funds | 25% | 59% | 16% |
| Managed futures | 19% | 71% | 10% |
Source: Natixis Investment Managers, 2025 Institutional Outlook, p. 13. Shares of respondents, not planned portfolio weights or flows.
For family-office hedge-fund allocations and survey data on strategy prominence, see hedge funds and managed futures in allocator portfolios.
What does a dedicated sleeve look like?
Public pension and trust documents show how adopters write the allocation into policy. Two published examples:
| Institution | Where trend following sits | Target |
|---|---|---|
| State Universities Retirement System of Illinois (SURS) | Systematic trend following within a 20% Crisis Risk Offset target | 6% |
| Hawaii Employer-Union Health Benefits Trust Fund (EUTF) | Listed as its own asset class, alongside long Treasuries (5%), alternative risk premia (5%) and tail risk/long volatility (2%) | 10% |
Sources: SURS, Investment Plan for Fiscal Year 2027; Hawaii EUTF, schedule of changes in fiduciary net position, June 30, 2025. Policy targets, not actual holdings at any date. Selected examples, not a representative sample.
SURS raised its Crisis Risk Offset target from 17% to 20% after a March 2025 asset-liability study and set systematic trend following at 6%. In fiscal year 2026 it awarded two new trend-following mandates of $390 million each, to AQR Alternative Trends and Man AHL Optimized Trend, $780 million in total, to complement its existing core trend-following managers, and removed one manager from the sub-asset class. [2]
Those awards are manager and implementation decisions. They do not show $780 million of net growth in the sleeve, because capital also moved between and away from managers. [2]
The Hawaii EUTF is a retiree-health (OPEB) trust rather than a pension fund. Its June 2025 schedule lists trend following at a 10% target allocation. [3]
Why do adopters' sleeves differ from survey averages?
A survey average spreads the allocation across every respondent, including those with none. A policy target describes only the institutions that hold the strategy. The two figures answer different questions.
A worked example shows the gap. If institutions holding 20% of a group's assets each run a 5% sleeve, the allocation across the whole group is 1%.
When reading a report or comparing a prospective mandate, it helps to check which of the two the figure describes.
Where does the sleeve sit in the policy?
Both examples place trend following alongside other diversifying lines, such as long-duration Treasuries, alternative risk premia and tail-risk or long-volatility strategies, rather than within a hedge-fund budget. Where the sleeve is funded from affects how large it can be and which benchmarks apply. [2, 3]
Callan, an institutional investment consultant, describes the motivations for these risk-mitigating portfolios: limiting drawdowns, avoiding forced sales of assets after a sell-off, including to meet benefit payments and capital calls, and having liquidity available when assets are down. [4]
What trade-offs do institutions weigh?
Callan also lists the costs. Institutions weigh them alongside the motivations: [4]
- Lower expected returns in non-stressed periods, which is most of the time.
- Higher fees than traditional public-market strategies.
- Governance demands and specialised personnel.
- Difficult manager selection, and capable managers that may be capacity-constrained or closed.
- The discipline to hold the allocation through quiet periods.
For the questions to ask of an individual programme, see how to evaluate a CTA track record and crisis alpha.
What does the evidence not show?
The survey figures are averages of stated allocations, and the policy examples are selected adopters. None of the sources establishes a standard sleeve for all pensions, family offices or insurers, or tests whether the allocation achieved its aims. [1-4]
Gnosis introduces institutional allocators to investment managers regulated in their home jurisdiction and evaluates those managers through Allocator IQ (AIQ). It does not advise on allocations, manage assets, hold custody or execute orders. Browse the manager universe.
Frequently asked questions
How much do institutions allocate to managed futures?
In Natixis's 2025 Institutional Outlook, alternatives were 17% of the average portfolio and managed futures and trend following were 4% of alternatives. Multiplied, that is about 0.68% of the total portfolio, a product of averages rather than a measured holding.
What does a dedicated trend-following allocation look like?
Published examples include SURS, with a 6% systematic trend-following target within a 20% Crisis Risk Offset target, and the Hawaii EUTF, with a 10% trend-following target allocation.
Why are pension trend-following targets higher than survey averages?
Survey averages spread allocations across every respondent, including those with none. A policy target describes only the institutions that hold the strategy.
Where do institutions place trend following in their portfolios?
In the published examples it sits alongside other diversifying strategies, such as long-duration Treasuries and alternative risk premia, rather than within a hedge-fund budget.
For institutional investors. This article provides general information, not investment, tax or legal advice or a recommendation of any manager, strategy or structure. Survey figures and policy targets describe the stated populations and dates and do not indicate future allocations or results. Past performance is not necessarily indicative of future results.
Sources
- Natixis Investment Managers, 2025 Institutional Outlook. Survey by CoreData Research, October-November 2024, of 500 institutional investors in 28 countries. Portfolio and alternatives allocation, p. 7; allocation plans, p. 13.
- State Universities Retirement System of Illinois (SURS), Investment Plan for Fiscal Year 2027. Asset allocation targets and Crisis Risk Offset section.
- Hawaii Employer-Union Health Benefits Trust Fund, Schedule of Changes in Fiduciary Net Position by Employer, June 30, 2025 and 2024 (submitted by the State Auditor). Target allocation table, long-term expected rate of return note.
- Callan, RMS Introduction: A Guide for Institutional Investors (blog). Motivations, costs and challenges.