NEW YORK ( TheStreet) -- Managed futures offer investors exposure to commodities, but with a strategy designed to make money in up or down markets. Instead of only going long a commodity, these funds can take short positions as well, based on the rules guiding the underlying index. Over the long-term, this strategy can pay off.An ETN that tracks a long/short commodity index: ELEMENTS S&P CTI ETN ( LSC), or ELEMENTS Linked to the S&P Commodity Trends Indicator - Total Return. With an average of 80,000 shares trading per day, volume is adequate, but investors must weigh the credit risk of the issuer, HSBC USA. LSC has an expense ratio of 0.75%. Since inception in June 2008, LSC is down about 17%, but PowerShares DB Commodity ( DBC) is down more than 50% and iShares S&P GSCI Commodity-Indexed Trust ( GSG) is down more than 60%. The index tracked by LSC uses a moving exponential average to decide whether to go long or short in each sector. When the price is above the average, the index will go long the commodity, and when it is below, the index will go short. In the case of energy, the index will not go short due to potential upside volatility. Instead, energy's 37.5% weight in the index is spread "proportionately to the other five sectors" as the fund takes a neutral position. The sectors are rebalanced monthly and the components within the sectors are rebalanced annually. As of the May 2010 rebalancing, LSC is long everything in its index except grains, industrial metals, coffee and sugar. Current weightings are 37.5% energy, 23% grains, 10% industrial metals 10.5% precious metals, 10% livestock, 3% in coffee, and 2% each in cocoa, cotton and sugar. From February 2009 until May 2010, LSC lost about 20% while DBC and GSG gained about 20%. Since the system uses moving averages, it will tend to lag at crossover points, but do well as long-term trends unfold. Most of LSC's underperformance came in March, April and May of 2009 as commodities snapped back and rallied. It underperformed again in October 2009 as some commodities rallied strongly.