VettaFi Looks to TFPN Holdings For Clues After Fed Rate Cut

VettaFi highlighted the Blueprint Chesapeake Multi-Asset Trend ETF (ticker: TFPN) and interviewed Portfolio Manager Jon Robinson in a September 20, 2024, article title, “Opportunity Clues in Trend-Following ETFs.”  TFPN is sub-advised by two partners: Blueprint Fund Management (an asset management firm that designs, distributes, and manages systematic, process-driven, and transparent investment strategies for financial advisors) and Chesapeake Capital Corporation (an innovative provider of systematic alternative investment solutions that was founded by legendary Turtle Trader Jerry Parker). TFPN seeks capital appreciation by trend following as many as 500 securities, futures, and forward contracts across four macro asset classes. The ETF’s massive global exposure and long/short flexibility can adapt during all market cycles.

Below are excerpts from the article:

Trend Following Process Controlling Fixed Income Exposures

“The latest portfolio update for this fund tells an interesting story about fixed income. If the trend is your friend, duration is your newest darling.

TFPN has been long credit in high yield and corporate bonds for a while. It has also owned mortgage-backed securities and municipal bonds in the past year. These are all parts of the fixed income universe that have an ‘equity and interest rate kicker ‘to help drive results, as Robinson puts it. It makes sense given that equities, too, have been riding an uptrend in that time frame.”

TFPN Remains Long Equities

“On the equities front, TFPN’s latest portfolio adjustments don’t suggest a reversal in its long bet as much as it simply tones down the overall positioning. The portfolio remains net long equities. But some long positions have decreased as market leadership changes from growth to value.

‘Conditions continue to be mostly favorable for equities, as evidenced by the number of uptrends,’ the fund’s report says. ‘The pivot from hawkish to dovish in monetary policy and the upcoming U.S. election will likely keep equity markets on edge as we finish out 2024.’”

Seeking to Manage Downside Risk

“But what happens if a trend changes on a whim?

According to Robinson, that happens sometimes, and managers can get allocations wrong. TFPN manages that risk by making sure positions have stop losses in place.

‘The idea is that if you are wrong, you are not wrong for very long,” Robinson said. “Trend followers aren’t known for being the life of the party, but we always live to fight another day.’”