Welton Investment Partners (WIP) is a leading investment management firm specializing in quantitative macro and trend following strategies. With over 30 years of experience, WIP has demonstrated expertise in navigating different market environments. This article provides insights into WIP’s approach to CTA strategies and managing drawdowns based on their research.
WIP Views CTA Strategies as Effective Diversifiers
The first reference article explains how WIP sees CTA strategies like trend following as attractive long-term investments that can provide diversification benefits. Although CTAs have faced reputation issues in the past, WIP believes strategies like BlueTrend have strong capacity and performance potential especially after the 2008 financial crisis.
Analysis of CTA Index Drawdowns Over Time
The second article by WIP analyzes the drawdowns experienced by the SG Trend Index over the past 2 decades. It finds that CTA drawdowns are moderate compared to equity indexes. The analysis also shows that drawdowns tend to occur more frequently in high opportunity periods when trend following strategies can capture directionality.
Drawdowns Seen as Buying Opportunities
Rather than problems, WIP views drawdowns as inherent to market volatility and rotation across asset classes for diversified strategies like macro and trend following. As shown through historical analysis, investing during drawdowns has resulted in significant outperformance over 1-year, 3-year and 5-year periods.
As a leading CTA manager, Welton Investment Partners emphasizes the long-term effectiveness of quantitative global macro and trend following strategies for institutional investors. Through in-depth research into indices like SG Trend, WIP provides valuable insights into the performance characteristics and drawdown behaviors of this asset class.