Key Takeaways
- • Simplify Asset Management terminated its advisory agreement with Altis Partners for the $1.6B CTA managed-futures ETF (effective Aug. 31), bringing portfolio management in-house under CEO Paul Kim's direction following departures of portfolio managers Michael Green and Paisley Nardini.
- • CTA's portfolio composition shifted dramatically beginning in March/April 2026, concentrating into energy commodities with 42% of risk tied to Brent crude and 33% to diesel futures as of Sept. 4, while reducing position count from over 100 to under 50 and eliminating interest-rate exposures.
- • Fund volatility has doubled to roughly twice its historical range and tripled versus its largest competitor; year-to-date performance through Sept. 3 stands at approximately 10% versus a 12% benchmark return, underperforming despite elevated commodity exposure.
- • Altis Partners' former chief investment officer Charles McGarraugh (previously Goldman Sachs's global head of metals trading) stated the firm views its research, technology, and investment process as central to CTA's earlier outperformance and indicated future product launches under the Altis brand.
Summary
The $1.6 billion Simplify CTA managed-futures ETF underwent significant structural and strategic changes as of late August 2026, culminating in a complete severance of its three-year advisory relationship with Altis Partners. The Aug. 31 regulatory filing disclosed the termination and marked a transition to in-house portfolio management. CEO Paul Kim of Simplify Asset Management attributed the shift to the company's development of internal "resources, expertise and systems" sufficient to execute the strategy independently. The transition occurred amid portfolio manager departures, including Michael Green and Paisley Nardini from Simplify.
The advisory change coincided with a dramatic portfolio repositioning that began in March 2026 and accelerated in April. Bloomberg data and Simplify's disclosures reveal the fund aggressively concentrated into energy commodities, specifically Brent crude (42% of risk) and diesel futures (33% of risk) as of Sept. 4. Concurrently, the fund reduced its position count from its historical norm of over 100 holdings to fewer than 50, eliminating interest-rate exposures entirely. This concentration strategy represents a material departure from the diversified approach typical of managed-futures strategies and has directly impacted fund risk characteristics.
The portfolio shift corresponds with elevated volatility: CTA's 20-day volatility has reached approximately twice its historical range and roughly three times that of its largest peer competitor. This concentration has weighed on relative performance; through Sept. 3, the fund returned approximately 10% year-to-date versus a 12% benchmark return. The underperformance despite heavy commodity exposure suggests either timing challenges in the energy complex or the impact of reduced diversification on broader market conditions.
Altis Partners, while departing as adviser, indicated confidence in its original investment framework. Charles McGarraugh, Altis's chief investment officer and former global head of metals trading at Goldman Sachs, stated in communications with Bloomberg that the firm attributes CTA's earlier results to its research, technology, and investment process. Altis signaled intention to deploy this intellectual property through future product launches under its own brand. Simplify's Paul Kim acknowledged the partnership cordially, stating the firm was "grateful for the earlier partnership with Altis and wish them the best."
The advisory change coincided with a dramatic portfolio repositioning that began in March 2026 and accelerated in April. Bloomberg data and Simplify's disclosures reveal the fund aggressively concentrated into energy commodities, specifically Brent crude (42% of risk) and diesel futures (33% of risk) as of Sept. 4. Concurrently, the fund reduced its position count from its historical norm of over 100 holdings to fewer than 50, eliminating interest-rate exposures entirely. This concentration strategy represents a material departure from the diversified approach typical of managed-futures strategies and has directly impacted fund risk characteristics.
The portfolio shift corresponds with elevated volatility: CTA's 20-day volatility has reached approximately twice its historical range and roughly three times that of its largest peer competitor. This concentration has weighed on relative performance; through Sept. 3, the fund returned approximately 10% year-to-date versus a 12% benchmark return. The underperformance despite heavy commodity exposure suggests either timing challenges in the energy complex or the impact of reduced diversification on broader market conditions.
Altis Partners, while departing as adviser, indicated confidence in its original investment framework. Charles McGarraugh, Altis's chief investment officer and former global head of metals trading at Goldman Sachs, stated in communications with Bloomberg that the firm attributes CTA's earlier results to its research, technology, and investment process. Altis signaled intention to deploy this intellectual property through future product launches under its own brand. Simplify's Paul Kim acknowledged the partnership cordially, stating the firm was "grateful for the earlier partnership with Altis and wish them the best."
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