Diversified, rules-based programs that capture durable directional moves across global futures markets — patient when markets are quiet, present when they break.
Trend following is the classic managed futures strategy, and for good reason: it’s one of the few systematic approaches with a 40+ year live track record across regimes, and it has historically been one of the more reliable sources of “crisis alpha” — the tendency to perform when stocks and bonds are correlated and falling together.
It is also the strategy that demands the most from an allocator’s discipline. Trend programs win their long-term records by being patient through long sideways periods and avoiding the temptation to abandon the strategy after a string of small losses. The investors who get the long-term returns are the ones who stay invested through the drawdowns. We help clients build allocations sized correctly so that’s actually possible.
What we mean by trend following
Trend-following programs take long or short positions across dozens of futures markets — equity indices, interest rates, currencies, energies, metals, grains, softs, livestock — based on whether the market is in a durable uptrend, downtrend, or neither. Holding periods are typically weeks to several months. Most trend programs hold 30–60 positions at any given time, sized by volatility so each position contributes roughly equal risk.
The defining characteristic isn’t the entry signal — many trend systems use simple moving average crossovers or breakout rules — but the discipline to hold winning positions long enough to capture full moves, cut losers quickly, and stay diversified enough that no single market can sink the program.
How we implement
Three things make the difference between a trend program that works in practice and one that only works on paper:
True diversification. A trend program running 12 markets is not a real trend program. The historical track record of trend following depends on having enough uncorrelated markets that something is trending most of the time. The programs we work with run 50+ markets across multiple asset classes, with position sizing that prevents any one market from dominating the portfolio.
Position sizing that survives drawdowns. Trend programs go through 15–25% drawdowns as a normal feature, not a bug. The right account size is one where a 25% drawdown is uncomfortable but doesn’t force liquidation. Sizing the allocation correctly is more important than picking the “best” CTA.
Multi-CTA construction where appropriate. For meaningful allocations, splitting capital across two or three trend programs with different parameter sets (faster vs. slower, more vs. less concentrated, with vs. without short-term components) typically smooths the equity curve significantly compared to single-program exposure. We build these constructions for clients where the allocation size supports it.
Programs are run as separately managed accounts in your name at our cleared FCMs (R.J. O’Brien, StoneX Financial, Phillip Capital). Daily statements come from the FCM directly. The CTA has trading authority but cannot withdraw funds.
Who this is for
Trend following is most appropriate for allocators who:
Want a strategic diversifier to a stock-and-bond portfolio with multi-decade evidence of low correlation and crisis-period outperformance.
Have a multi-year holding horizon and can stay invested through drawdowns of 15–25% or more without abandoning the strategy.
Understand that trend returns are lumpy — long quiet periods followed by significant moves — and that timing entries into trend programs is itself a losing strategy.
Value the operational and tax characteristics of running through a separately managed account rather than a pooled commodity fund.
Account minimums and structure
Most institutional-quality trend programs require separately managed account minimums of $250,000 to $1 million, depending on the manager. Some capacity-constrained flagship programs require considerably more. Smaller allocations can typically access the same strategy through the manager’s commingled fund vehicle, which has its own trade-offs (we cover those in Managed Futures vs Hedge Funds).
For clients allocating $1M+ across multiple programs, we typically recommend an SMA-based construction with two or three trend CTAs of complementary styles. For smaller allocations, single-CTA exposure either through SMA or fund structure is usually the right call.
Request the program brief
If you’d like the disclosure documents, historical performance, and program-specific minimums for the trend-following CTAs we work with, request the program brief below. A principal will respond, typically within one business day.
Frequently asked questions
How is trend following different from momentum?
The categories overlap but aren’t identical. Trend following typically runs on weekly-to-monthly signals across many markets with simple breakout or moving-average logic. Momentum strategies often run on faster signals, with more dynamic position sizing and a tighter focus on persistence rather than trend continuation. In practice, trend programs and momentum programs are usually decorrelated enough that running both makes sense for larger allocations.
What kind of drawdowns should I expect?
Historically, trend programs experience 15–25% peak-to-trough drawdowns multiple times per decade, with occasional drawdowns approaching 30%. Recovery periods can take 12–24 months. The specific drawdown history of any program we recommend is in the disclosure document and we walk through it explicitly before any capital is committed.
Does trend following still work?
It’s the right question to ask. Trend-following returns were thin through much of 2012–2019, leading many allocators to abandon the strategy. Then 2022 produced one of the best years on record for trend programs as stocks and bonds fell together. The pattern of “looks dead, then suddenly works again” is recurrent across the strategy’s history. We don’t promise it will repeat, but we don’t think the right time to add the diversifier is after it has just delivered.
How much of my portfolio should be in trend following?
Institutional allocators commonly target 5–15% of total portfolio assets in managed futures broadly, with trend-following as the largest component. The right number depends on the rest of your portfolio, your tolerance for the kind of drawdowns above, and whether you’re combining trend with shorter-term systems. We walk through sizing in the first conversation.
Can I run trend following alongside other managed futures strategies?
Yes, and we generally recommend it for clients with allocation sizes above $500,000. Combining trend with short-term systematic and discretionary global macro typically improves the portfolio’s risk-adjusted return without proportionally adding total risk. The styles are diversifying to each other in a way that broad equity factors typically aren’t.
Past performance is not necessarily indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Trend-following programs are speculative and may involve a high degree of risk. The information on this page is for general educational purposes and does not constitute investment advice or an offer to sell or solicitation of an offer to buy any specific managed futures program. Specific program details, including disclosure documents, are provided directly to qualified prospects under standard NFA-compliant procedures.