Key Takeaways
- • The Simplify Managed Futures Strategy ETF (NYSEARCA:CTA) marked its first anniversary, invests in equity, U.S. Treasury, commodity, and foreign exchange futures contracts according to Seeking Alpha's description.
- • The author compares CTA's results against other managed futures ETFs and standard bond funds, citing negative correlation to stocks as a key advantage of these strategies.
- • The author's view is that managed futures may work over short periods but are not suited as a buy-and-hold asset.
- • The article was co-produced with Hoya Capital Real Estate and includes a promotional call to action for a subscription service.
Summary
A Seeking Alpha analysis marks the first anniversary of the Simplify Managed Futures Strategy ETF (NYSEARCA:CTA), a fund that, under normal market conditions, invests in a portfolio of equity, U.S. Treasury, commodity, and foreign exchange futures contracts. The fund seeks long-term capital appreciation.
The article frames managed futures and other alternative strategies against a backdrop of low yields and elevated equity valuations. It notes that with rates on quality bond ETFs below 1% during the prior summer and U.S. equities trading at historically high valuations, funds using alternative strategies have attracted growing investor attention.
The author reviews CTA's results relative to other managed futures ETFs and to standard bond and bond funds. A central point is the potential diversification benefit of these strategies, which the author describes as having a negative correlation to stocks.
The author's conclusion is more cautious. In his view, managed futures strategies may work over short periods but are not well suited as a buy-and-hold asset. The analysis is opinion-based and the author states he is long VTI and receives no compensation beyond Seeking Alpha's fees. The piece was co-produced with Hoya Capital Real Estate, and Seeking Alpha notes that past performance is no guarantee of future results.
The article frames managed futures and other alternative strategies against a backdrop of low yields and elevated equity valuations. It notes that with rates on quality bond ETFs below 1% during the prior summer and U.S. equities trading at historically high valuations, funds using alternative strategies have attracted growing investor attention.
The author reviews CTA's results relative to other managed futures ETFs and to standard bond and bond funds. A central point is the potential diversification benefit of these strategies, which the author describes as having a negative correlation to stocks.
The author's conclusion is more cautious. In his view, managed futures strategies may work over short periods but are not well suited as a buy-and-hold asset. The analysis is opinion-based and the author states he is long VTI and receives no compensation beyond Seeking Alpha's fees. The piece was co-produced with Hoya Capital Real Estate, and Seeking Alpha notes that past performance is no guarantee of future results.
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