In a recent special edition of Behind the Ticker recorded live at the Exchange ETF Conference, Paisley Nardini, Vice President and Client Portfolio Strategist at Simplify Asset Management, joined the show to discuss her path from bond trading to ETF strategy—and dive into Simplify’s Managed Futures Strategy ETF, ticker CTA. With a career that began on a bond trading desk and later evolved through roles at PIMCO and in institutional portfolio management, Nardini has developed a strong passion for bringing hedge-fund-caliber strategies to a broader investor base.

Simplify launched in 2020 following a key SEC rule change that expanded the use of derivatives in ETFs. Since then, the firm has grown to over $7 billion in AUM across 35 ETFs, becoming known for its innovative use of options and derivatives. While often categorized as an “alternative ETF issuer,” Nardini emphasized that Simplify’s lineup includes not only pure diversifiers like CTA but also core active fixed income and systematic equity strategies. She described CTA as a capital-efficient, hedge-fund-style managed futures fund focused solely on commodities and interest rate futures—excluding equities and currencies to offer a cleaner source of diversification.

CTA stands out by employing a multi-signal model composed of four drivers: trend, mean reversion, intermarket (or risk-off), and carry. The trend signal captures directional market movements across short, medium, and long-term timeframes. The mean reversion signal acts as a counterbalance, scaling exposure when trends become extended. The intermarket factor assesses cross-asset relationships—such as equities selling off while bonds rally—to adjust positioning dynamically. Finally, the carry signal evaluates the interest rate curve to avoid negative carry in periods of inversion. This hedge-fund-inspired, daily-rebalanced model is powered by research from Altis Partners, a UK-based CTA firm.

The fund uses futures contracts, which naturally embed leverage, but Simplify imposes a 25% margin-to-equity constraint to manage risk. Unlike many peers, CTA has no sector or position caps, allowing for high-conviction trades—such as its profitable exposure to the cocoa market in 2023. Nardini also addressed the ETF’s performance through volatile periods, highlighting its ability to pivot quickly, reduce drawdowns, and remain uncorrelated to both stocks and bonds. With negative correlation to equities and the potential for equity-like returns, CTA is increasingly being used as a key diversifier in modern model portfolios.