An index that hasn't changed its sector weights in 20 years, in an industry obsessed with optimization.

On the Behind the Ticker podcast with Brad Roth on ETF.com, CIO of Managed Futures and COO Jerry Prior explained why Mount Lucas has kept the MLM index's bond, currency, and commodity weightings intact since 2005: "We value being roughly right on these weights instead of precisely wrong."

The conversation covered how the index is constructed, how the short side works, and why 2022 played out the way it did, long commodities early, short bonds through the third quarter, precisely when the 60/40 portfolio needed a diversifier most.

Jerry also made the case against volatility targeting, explaining that reducing exposure when volatility expands is counterproductive in a trend-following strategy: it monetizes gains inside the portfolio instead of letting them flow back into client allocations when equities are under stress.

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This material contains Jerry Prior's and the speaker's opinions. It is provided for informational purposes only and should not be regarded as investment advice or a recommendation of specific securities.

Diversification does not ensure a profit or guarantee against a loss.

For KMLM standard performance, top 10 holdings, risks, and other fund information, please click here.