Alternatives ETFs are built to behave differently from stocks, and the year to Oct 19, 2026 gave that promise a real test. The S&P 500 fell in 24 of the 52 weeks measured, dropping 1.02% on average in those weeks. Across the 67 alternatives ETFs ETFIQ tracked, 21 rose on average during those same down weeks, and the median fund across the full group fell by only 32% as much as the index did, a number known as down-week capture.
The picture changes by strategy, and the strategies are not alike enough to read as one group. The median hedged equity fund moved closely with the S&P 500, a correlation of +0.88, and its median down-week capture was 54.0%, meaning it still fell, just less. Long-short equity carried a similar correlation, +0.67, and a higher capture of 60.6%. Managed futures funds behaved more independently, with a median correlation of +0.27 and a median down-week capture of 15.8%, the lowest of the larger strategy groups. Volatility funds stood apart entirely: a median correlation of −0.61 and a median down-week capture of −60.4%, meaning they rose, on average, when the index fell. Market neutral funds showed the same pattern, with a median correlation of −0.42 and a median capture of −77.5%, though that group held only two funds.
At the individual fund level, the ETFs with the largest gains in down weeks were the volatility funds UVXY, VIXY, and VXX, each rising more than 2% on average in weeks the S&P 500 fell, with down-week captures below −200%. BTAL, a market neutral fund, averaged +1.20% in those weeks with a capture of −117.8%. Managed futures funds such as CTA and KMLM also rose on average, by 0.72% and 0.62%, with captures of −70.3% and −60.5%. At the other end, hedged equity funds including THEQ, XTR, and QTR posted down-week captures above 95%, moving nearly in step with the index on its worst weeks.
Holding up in falling markets is a separate question from earning more than cash. Of the 67 funds, 48 finished ahead of T-bills over the same 52 weeks. Among the 21 funds that rose when stocks fell, only 11 also beat T-bills. By strategy, 15 of 21 hedged equity funds and 15 of 17 managed futures funds were ahead of T-bills, compared with 4 of 9 volatility funds and 1 of 2 market neutral funds. Funds like UVXY, VIXY, and VXX, the three with the sharpest rises on down weeks, each trailed T-bills by more than 50 percentage points over the full period, a reminder that short-term protection and long-term return are not the same measurement.
Readers can look up any fund's correlation, down-week capture, and performance against T-bills on its individual page on ETFIQ.