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CTAs Are Back In Vogue

CTAs are back as a diversification strategy amid US mid-term elections and trade war risks, according to a report from Lyxor’s Cross Asset Research team.   The report put out by senior strategists Philippe Ferreira and Jean-Baptiste Berthon and research analyst Anny Mauny, states that in the context of the positive correlation between equity and bond returns and in light of rising political risks ahead of U.S. midterm elections, which the trade war rhetoric exemplifies in our view, CTAs are increasingly attractive for portfolio diversification purposes. It cites a backdrop of easing market tensions as US earnings season looms, but geopolitical concerns...