Key Takeaways
- • The IASG CTA Index declined 0.7% in July, reducing year-to-date gains to 3.44%, while the IASG Trend Following Strategy Index fell 2.7%, nearly halving its 2026 gain to 2.82%, as established market trends weakened or reversed.
- • Only 42% of reporting managers posted gains in July, with the average manager down 0.77%, marking a significant deterioration from early-year performance when trend-following strategies led CTA performance.
- • Cryptocurrency and energy strategies outperformed in July, gaining 12.86% and 10.88% respectively, while grains posted 8.9% gains driven by oats and corn, highlighting sector-level divergence amid broader CTA headwinds.
- • High-conviction performers including the Mulvaney Global Market Fund (down 4%+ in July but up 69.86% YTD) and Drury Diversified Trend Following Program (down 5.26% in July, cutting YTD gains to 19.41%) experienced sharp monthly reversals.
- • The Tulip Trend Fund suffered a 15.8% loss in July, falling to -15.4% year-to-date, driven by losses in agricultural short positions (wheat, corn) and currency bets against the Korean won, Japanese yen, and New Zealand dollar.
Summary
Commodity trading advisors and trend-following funds faced a sharply challenged July 2026, with broad-based underperformance signaling a structural shift in market conditions. The IASG CTA Index declined 0.7% for the month, reducing its year-to-date performance to 3.44%, while the IASG Trend Following Strategy Index fell more severely at 2.7%, nearly halving its 2026 gain to just 2.82%. This marks a marked departure from the sector's strong early-year performance, when trend followers were among the top-performing CTA segments.
The performance deterioration was widespread. Only 42% of managers reporting to the IASG database posted positive returns in July, with the average manager down 0.77%. According to IASG's monthly analysis, "June's challenging environment carried into July, with traditional trend-following and systematic strategies continuing to face headwinds. After leading CTA performance earlier in the year, trend followers have faced a more difficult environment as established market trends have weakened or reversed." This reversal in trend strength—the core input for systematic trend-following models—has left many funds vulnerable to whipsaws and false signals.
Performance was highly differentiated across asset classes. Cryptocurrency and energy strategies emerged as July's clear winners, posting gains of 12.86% and 10.88% respectively, with energy benefiting from rallies in heating oil and light sweet crude. Grains gained 8.9%, led by outsized moves in oats (up 17.41%) and corn (up 11.34%). However, these pockets of strength masked severe underperformance in other markets, particularly currencies and agricultural directional bets gone wrong.
Even this year's strongest performers posted significant losses in July. The Mulvaney Global Market Fund, despite being up 69.86% year-to-date, dropped over 4% in the month. The Drury Diversified Trend Following Program fell 5.26%, reducing its 2026 gain to 19.41%. Most severely hit was the Tulip Trend Fund, which plunged 15.8% in July, pushing its year-to-date return to -15.4%. The Tulip fund's sharp decline stemmed from large short agricultural positions (wheat and corn) and long exposure to U.S. cattle that moved adversely, compounded by currency losses from short positions in the Korean won, Japanese yen, and New Zealand dollar. These losses underscore the concentrated risks embedded in many CTA portfolios when directional convictions reverse suddenly.
The performance deterioration was widespread. Only 42% of managers reporting to the IASG database posted positive returns in July, with the average manager down 0.77%. According to IASG's monthly analysis, "June's challenging environment carried into July, with traditional trend-following and systematic strategies continuing to face headwinds. After leading CTA performance earlier in the year, trend followers have faced a more difficult environment as established market trends have weakened or reversed." This reversal in trend strength—the core input for systematic trend-following models—has left many funds vulnerable to whipsaws and false signals.
Performance was highly differentiated across asset classes. Cryptocurrency and energy strategies emerged as July's clear winners, posting gains of 12.86% and 10.88% respectively, with energy benefiting from rallies in heating oil and light sweet crude. Grains gained 8.9%, led by outsized moves in oats (up 17.41%) and corn (up 11.34%). However, these pockets of strength masked severe underperformance in other markets, particularly currencies and agricultural directional bets gone wrong.
Even this year's strongest performers posted significant losses in July. The Mulvaney Global Market Fund, despite being up 69.86% year-to-date, dropped over 4% in the month. The Drury Diversified Trend Following Program fell 5.26%, reducing its 2026 gain to 19.41%. Most severely hit was the Tulip Trend Fund, which plunged 15.8% in July, pushing its year-to-date return to -15.4%. The Tulip fund's sharp decline stemmed from large short agricultural positions (wheat and corn) and long exposure to U.S. cattle that moved adversely, compounded by currency losses from short positions in the Korean won, Japanese yen, and New Zealand dollar. These losses underscore the concentrated risks embedded in many CTA portfolios when directional convictions reverse suddenly.
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