"The challenge is simple: managed futures strategies thrive on volatility and sustained trends, not relentless equity bull markets. When stocks grind higher month after month, trend-following algorithms that go long commodities, short bonds, or rotate across global futures markets generate modest returns at best. The fund has faced headwinds in environments characterized by persistent equity strength and limited cross-asset volatility."
"CTA's 2026 performance hinges on whether markets experience sustained volatility and directional trends. Managed futures historically perform best during market stress when traditional 60/40 portfolios struggle-think 2008, 2022's bond collapse, or the COVID crash. Monitor the CBOE Volatility Index (VIX) closely. When the VIX sustains readings above 20 for extended periods, it signals environments where trend-following can capture profits. Watch for commodity market breakouts. Rising oil prices, surging agricultural commodities, or gold breaking to new highs create trending conditions CTA's models exploit."
Simplify Managed Futures Strategy ETF (CTA) has struggled since its March 2022 launch, failing to deliver meaningful returns amid a low-volatility equity bull market. Managed futures rely on volatility and sustained directional trends, so persistent equity strength and limited cross-asset volatility have produced only modest gains for trend-following algorithms. CTA's 2026 performance depends on renewed market stress and extended trends, with higher VIX readings (sustained above 20) and commodity breakouts creating profitable conditions. Rising oil above $85 per barrel or gold past $2,150 could trigger trend capture. The fund applies a momentum-based approach that positions long futures with positive trends across multiple timeframes.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]