Merryn Talks Money What Can Quant Trading Strategies Teach Us About Markets?
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Mar 2, 2026 Simon Judes, Chief Investment Officer at Winton and former physicist, explains quantitative investing and how rules, backtesting and automation differ from stock picking. He covers trend-following CTAs, why momentum can diversify portfolios, how AI and alternative data aid research, and which niche markets and risks shape real-world quant strategies.
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CTA Momentum Rule Explained
- CTAs trade macro futures across equities, bonds, currencies and commodities using recent price momentum: long what's risen, short what's fallen.
- Judes describes this simple momentum algorithm as the core CTA approach.
CTAs Offer True Diversification Through Futures
- CTAs provide portfolio diversification because they trade many uncorrelated futures and can go short as easily as long, hedging equity/bond drawdowns.
- Judes notes 2022 showed bonds and equities falling together, increasing CTA attractiveness.
Make Trend Exposure A Permanent Allocation
- Consider a permanent allocation to trend following rather than trying to time when it will work.
- Judes says CTAs historically improved returns and mitigated drawdowns in bad equity/bond periods like 2008 and 2022.