Current market environment performance of dynamic, risk-managed investment solutions.
By Will Hubbard
If you’re from the Detroit area and mention American football to anyone, anywhere, you’re bound to hear, “Go Lions!” or “How ‘bout them Lions?” After clinching the No. 1 seed and the NFC North title with their win over the Minnesota Vikings, it’s clear the Lions are having an unprecedented year—rising from the 0-16 team of 2008 to the powerhouse they are today. I think “powerhouse” is the right label, considering the Viking’s only touchdown was their plane landing at the Detroit Metropolitan Airport.
The Lions’ incredible transformation from underdog to America’s team (sorry, Cowboys) reminds me of another remarkable rise—this time in the world of investing. Commodity trading advisors (CTAs) have evolved from a niche investment to a valuable tool in modern portfolio construction, offering unique ways to navigate uncertain markets. For investors of all stripes, 2025 could be the year to take a look at CTAs.
The basics: What CTAs bring to the game
Commodity trading advisors (CTAs) might sound unfamiliar, but don’t let that scare you off from taking advantage of their benefits.
CTAs are professional money managers who use data-driven strategies to trade futures contracts across asset classes such as stocks, bonds, commodities, and currencies.
What makes CTAs unique is their flexibility. Unlike traditional investments that rely on market growth, CTAs can go long (profiting when prices rise) or short (profiting when prices fall). This adaptability allows them to respond to changing market conditions, making them a valuable tool for diversification and risk management.
One key benchmark for CTA performance is the Société Générale CTA Index (SocGen CTA Index), which tracks the performance of leading CTAs. As a measure of the broader CTA industry, it gives investors a big-picture view of how these strategies perform across different market environments.
CTAs on the rise again
With such a flexible approach to investing, it’s no surprise that CTAs have been gaining traction in recent years. Following the global financial crisis of 2007–2009, CTAs saw a surge in popularity, with industry assets growing from $196 billion to $337 billion in 2013, according to BarclayHedge data. However, after the initial excitement around their diversification benefits, growth stagnated—until the 2020 COVID-19 crisis reignited interest.
In 2022, CTAs had a standout year, with the SocGen CTA Index posting an 18% return, its best performance since 2000. This success has driven renewed interest, with industry assets now hovering around all-time highs. Despite two years of strong global equity performance, investors may want to consider CTAs as a strategic addition to their portfolios in 2025.
Why investors should consider CTAs
With equity markets near all-time highs and the S&P 500 up 53.19% over the last two years, forward-thinking investors are asking some tough but necessary questions about the future:
• How much more can earnings ratios expand?
• Will bonds protect my portfolio in a crisis?
• What if rates remain elevated or rise further due to inflation?
• How might geopolitical tensions, such as US-China relations or ongoing wars, impact markets?
• Could a global slowdown or shifts in trade policy affect commodity prices or demand for goods?
The flexibility of CTAs makes them uniquely equipped to address these challenges. CTAs can go long or short in any asset class—stocks, bonds, commodities, currencies, and more. If markets continue to roar, CTAs can follow along, benefiting from positive momentum. If volatility picks up, they can reduce equity exposure or capitalize on market reversals. If geopolitical tensions drive regional booms or busts, CTAs can participate in either direction. Similarly, if interest rates rise or fall, CTAs can shift positions to align with these changes, going long or short on bonds as needed.
A proven diversifier
With their flexibility and adaptability, CTAs have provided diversification across market cycles. As I noted in a recent article, they have historically improved portfolio metrics such as risk-adjusted returns and drawdowns.
The ability of CTAs to find opportunities in global markets is why they tend to perform well regardless of conditions in any one segment. However, this broad diversification can also limit their participation in major rallies. For example, in 2024, when equities surged and the S&P 500 gained 23% (while long-dated Treasurys lost 8%), CTAs underperformed, with the SocGen CTA Index posting a modest 2.4% gain. By contrast, in 2022, when both the S&P 500 and long-term Treasurys fell significantly—nearly 20% and 30%, respectively—and CTAs delivered an impressive 18% return.
These examples highlight the unique role CTAs can play in a portfolio. While they may not capture the full gains of every market rally, their ability to provide downside protection and reduce overall volatility makes them a valuable tool for diversification.
How FPI can bring managed futures to your portfolio
Flexible Plan Investments (FPI) is redefining how investors access CTAs and managed futures. As FPI president Jerry Wagner recently discussed, FPI has partnered with Eckhardt Trading Company to introduce the Quantified Eckhardt Managed Futures Strategy Fund (QETCX). This fund brings decades of Eckhardt’s systematic trading expertise to retail investors, offering low minimums, daily liquidity, and simplified tax treatment. FPI incorporates QETCX into two specialized strategies—QFC Managed Futures and QFC Dynamic Trends—that provide investors with multiple levels of dynamic risk management, diversification, and adaptability across market conditions.
The number of concerns investors face today—ranging from market volatility to geopolitical risks—is endless. But just as the Lions overcame years of setbacks to secure a 15-2 record this season, investors can build resilience into their portfolios with the right tools. Should the Lions play in the Super Bowl, you’ll see a sea of Honolulu blue representing fans across the country—a testament to their remarkable journey. Similarly, CTAs and managed futures offer a way to navigate uncertainty and stay in the game, providing the confidence to continue investing even when the unexpected happens. With FPI’s innovative strategies, you can add these powerful diversifiers to your portfolio in 2025 and beyond.