Going with the trend

Candriam
By November 23, 2021 16:13

Going with the trend

How CTAs work and what they can do in the age of low interest rates

Commodity Trading Advisor (CTA) strategies are an investment success story. They have attracted large inflows of assets, drawn in by their ability to generate returns through investment trend following despite a negative risk-free yield environment. 

Like hedge funds, CTAs invest in futures to capitalise on market trends regardless of market direction. This ability is difficult to underestimate in today’s low interest rate environment, particularly because government bonds cannot be used to the same extent as in the past to mitigate the impact of equity corrections on balanced portfolios. CTAs’ tool box can unlock other benefits too, including volatility management and access to returns that are lowly correlated to traditional asset classes. These strategies can be used to get exposure to different trends across almost every asset class.

Candriam
By November 23, 2021 16:13

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