Key Takeaways
- • Graham Capital's flagship Tactical Trend fund gained 27% through the end of August 2026, according to a tabulation from Societe Generale, versus about 10% for commodity-fund peers and just over 3% for systematic diversified funds per HFR data.
- • Chief investment officer Tom Feng attributed part of the performance to deliberate manager intervention: a profit-taking and stop-loss framework introduced on the advice of founder Ken Tropin.
- • The fund manages $4 billion of Graham Capital's roughly $23 billion in total assets, which are split roughly evenly between systematic and discretionary strategies.
- • Graham added new component signals to its models and hired AI talent during industry performance dips, which Feng said is driving "prolific model development" contributing to returns.
- • Feng said September 2026 was another "solid month" for the fund.
Summary
Graham Capital's flagship Tactical Trend fund had returned 27% through the end of August 2026, according to a tabulation from Societe Generale, as reported by MarketWatch. Over the same period, commodity-fund peers in commodity-fund rankings were up about 10%, and systematic diversified funds gained just over 3%, according to HFR data. Feng confirmed that September was another "solid month" for the fund.
The performance gap reflects a deliberate departure from purely rules-based trading. Trend-following systematic funds typically act on price signals without discretion. Tom Feng, chief investment officer of Graham's quant strategies, told MarketWatch that the firm introduced a profit-taking and stop-loss concept into its decision-making process, rather than applying model outputs mechanically. The adjustment was suggested by Ken Tropin, who founded the firm in 1994. Feng said it contributed positively in several asset classes, citing metals, which rallied around the end of January, and energy, which rose in March. The models actively reduced exposures to lock in profits through subsequent choppy markets.
Graham also added a couple of new component signals to its models. Two targeted tactical trends, and another fundamental indicator was added to its more diversified quant macro strategy. A carry signal, which tracks interest-rate differentials between currencies, has also had a positive effect, Feng said. He noted that trend funds benefit from momentum persistence, while choppy or narrow-range markets are unhelpful. Recent conditions, including concerted gains in oil and commodities and a pronounced downtrend in global government bonds, have suited trend strategies.
Feng acknowledged that trend-following has vulnerabilities. April 2025 was cited as a period when systematic strategies were whipsawed by an abrupt reversal in risk assets, and low-volatility, highly correlated markets such as the zero-rate era of the 2010s tend to favor passive strategies. Feng said the 2025 shock had a silver lining for the firm: during industry performance dips, Graham hired new AI talent, which he credited with the current model development driving outperformance. Bruno Schneller, managing partner of wealth manager Erlen Capital Management, said trend-following strategies can provide diversification when correlations rise during market stress.
The performance gap reflects a deliberate departure from purely rules-based trading. Trend-following systematic funds typically act on price signals without discretion. Tom Feng, chief investment officer of Graham's quant strategies, told MarketWatch that the firm introduced a profit-taking and stop-loss concept into its decision-making process, rather than applying model outputs mechanically. The adjustment was suggested by Ken Tropin, who founded the firm in 1994. Feng said it contributed positively in several asset classes, citing metals, which rallied around the end of January, and energy, which rose in March. The models actively reduced exposures to lock in profits through subsequent choppy markets.
Graham also added a couple of new component signals to its models. Two targeted tactical trends, and another fundamental indicator was added to its more diversified quant macro strategy. A carry signal, which tracks interest-rate differentials between currencies, has also had a positive effect, Feng said. He noted that trend funds benefit from momentum persistence, while choppy or narrow-range markets are unhelpful. Recent conditions, including concerted gains in oil and commodities and a pronounced downtrend in global government bonds, have suited trend strategies.
Feng acknowledged that trend-following has vulnerabilities. April 2025 was cited as a period when systematic strategies were whipsawed by an abrupt reversal in risk assets, and low-volatility, highly correlated markets such as the zero-rate era of the 2010s tend to favor passive strategies. Feng said the 2025 shock had a silver lining for the firm: during industry performance dips, Graham hired new AI talent, which he credited with the current model development driving outperformance. Bruno Schneller, managing partner of wealth manager Erlen Capital Management, said trend-following strategies can provide diversification when correlations rise during market stress.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.