Key Takeaways
- • Simplify Asset Management launched the Simplify Managed Futures Strategy ETF (ticker: CTA) on NYSE Arca, offering systematic long/short exposure across US and Canadian commodities and interest rate futures while explicitly excluding equity futures to maintain low equity correlation.
- • The fund allocates across four distinct strategy models—price trend, mean reversion, carry, and risk-off—developed and managed by Altis Partners, a commodity trading advisor with over 20 years of sector experience.
- • CTA is designed to deliver absolute returns and portfolio diversification, targeting investors seeking return sources beyond traditional equity-dominated portfolios amid stretched valuations and near-zero interest rates at the time of launch.
- • The fund structure emphasizes downside risk management and consistent positive returns across varying market environments, positioning it as a potential hedge within equity-centric institutional portfolios.
Summary
Simplify Asset Management has entered the managed futures ETF space with the launch of the Simplify Managed Futures Strategy ETF (CTA), listed on NYSE Arca as of March 10, 2022. The fund represents the firm's effort to address a persistent challenge in the managed futures category: achieving diversification benefits without the high equity correlation that has historically plagued many competitor strategies.
The CTA fund pursues long-term capital appreciation through a systematic long/short managed futures strategy that deliberately excludes equity futures. Instead, it maintains exposure across US and Canadian commodities and interest rate futures, a structural choice designed to ensure low correlation with equity-dominated portfolios. David Berns, Chief Investment Officer and Co-Founder at Simplify, highlighted the strategic rationale: with interest rates near historic lows and equity valuations increasingly stretched, institutional investors have grown frustrated with managed futures strategies that fail to deliver meaningful diversification due to their implicit correlation with equity markets. The CTA fund was designed to solve that problem.
The fund's underlying investment approach combines four distinct systematic models, each with separate focus areas: price trend, mean reversion, carry, and risk-off strategies. These models are developed and managed by Altis Partners, a commodity trading advisor with more than two decades of industry experience. This multi-model architecture allows CTA to pursue dual portfolio objectives: generating consistent positive returns regardless of prevailing market conditions, and serving as a powerful diversifier within equity-centric portfolios through its emphasis on low equity correlation and downside risk management during market dislocations.
The launch reflects Simplify's broader expansion into alternative investment vehicles and positions CTA as an institutional-grade solution for asset allocators seeking systematic exposure to global macro trends with built-in hedging characteristics. The fund's exclusion of equity futures differentiates it from some competitors and directly addresses institutional feedback regarding correlation drag in traditional managed futures offerings.
The CTA fund pursues long-term capital appreciation through a systematic long/short managed futures strategy that deliberately excludes equity futures. Instead, it maintains exposure across US and Canadian commodities and interest rate futures, a structural choice designed to ensure low correlation with equity-dominated portfolios. David Berns, Chief Investment Officer and Co-Founder at Simplify, highlighted the strategic rationale: with interest rates near historic lows and equity valuations increasingly stretched, institutional investors have grown frustrated with managed futures strategies that fail to deliver meaningful diversification due to their implicit correlation with equity markets. The CTA fund was designed to solve that problem.
The fund's underlying investment approach combines four distinct systematic models, each with separate focus areas: price trend, mean reversion, carry, and risk-off strategies. These models are developed and managed by Altis Partners, a commodity trading advisor with more than two decades of industry experience. This multi-model architecture allows CTA to pursue dual portfolio objectives: generating consistent positive returns regardless of prevailing market conditions, and serving as a powerful diversifier within equity-centric portfolios through its emphasis on low equity correlation and downside risk management during market dislocations.
The launch reflects Simplify's broader expansion into alternative investment vehicles and positions CTA as an institutional-grade solution for asset allocators seeking systematic exposure to global macro trends with built-in hedging characteristics. The fund's exclusion of equity futures differentiates it from some competitors and directly addresses institutional feedback regarding correlation drag in traditional managed futures offerings.
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