July CTA drawdown puts manager selection to the test

July was a losing month for most commodity trading advisors, RIA Intel reports, but the index numbers only begin to explain what happened. The IASG CTA Index fell 0.7 percent, trimming its 2026 gain to 3.44 percent, while the IASG Trend Following Strategy Index dropped 2.7 percent, nearly halving its year-to-date return to 2.82 percent. Just over 42 percent of managers posted gains and the average manager lost 0.77 percent, a slide IASG's monthly report traced to a June carryover in which 'established market trends have weakened or reversed.'

The winners were concentrated in a few sectors, according to aiSource, which tracks CTAs: crypto managers gained 12.86 percent and energy managers 10.88 percent, while grains rose 8.9 percent on oats up 17.41 percent and corn up 11.34 percent. Even some of this year's strongest funds gave ground, with the Mulvaney Global Market Fund losing more than 4 percent in July after rising 69.86 percent on the year, and the Drury Diversified Trend Following Program slipping 5.26 percent to cut its 2026 gain to 19.41 percent.

The steepest loss among the named funds came from Tulip Trend Fund, off 15.8 percent in July and now down 15.4 percent on the year. Its monthly report points to concentrated factor bets: large short positions in wheat and corn, long positions in U.S. cattle, short currency exposure to the Korean won, Japanese yen and New Zealand dollar, and long interest-rate positions in Europe, Canada and Australia. Energy longs helped, but not enough.

On the other side, Quantedge Global Fund added nearly 8 percent in July, lifting its 2026 return to 34.6 percent; Aspect Diversified Fund gained 3.31 percent, to 11.32 percent year-to-date; and QMS Diversified Global Macro Strategy rose 3.54 percent, climbing back above water at 2.08 percent.

For advisors running managed futures sleeves, July was a test of manager selection. The steepest loss hit Tulip, whose concentrated grain, currency and rate positions turned against it simultaneously; Quantedge, Aspect and QMS made money in the same tape. The index average hid that spread, and the label alone diversified nothing.