Your Bonds Aren’t Hedging Anymore. Now What? Using Non-Correlated Assets to Build a More Resilient Core – Direxion – 11.18.26

Summary:

U.S. equities are near record highs, concentrated in a handful of mega-cap names, and bonds aren’t hedging the way they used to, as yields climb and stock-bond correlation rises. If your hedge isn’t hedging, what do you lean on when the next correction hits?

This session looks at one answer: trend-following managed futures, a strategy institutional allocators have used for decades to generate returns structurally disconnected from stocks and bonds by going long or short across commodities, currencies, and rates as trends emerge. We’ll cover what this type of strategy’s done in past drawdowns, including 2008, and why most advisors have never held it.

We’ll close with a new way to access that exposure without giving up equity exposure: the Direxion U.S. 500 Plus ETF (SPXP), which pairs full S&P 500 exposure with a systematic trend overlay on the same capital base, two for one, adding a non-correlated return stream without allocating extra capital.

This session will cover:

• Why rising stock-bond correlation is forcing a rethink of what "diversification" even means in a core portfolio
• What trend-following managed futures is, how it has historically behaved in equity drawdowns (including 2008, 2020, and 2022), and why it's been underused by advisors
• The mechanics of "return stacking” (also known as “portable alpha”, institutionally), holding two non-correlated return sources on one capital base instead of trading equity exposure away for it
• Inside the Auspice U.S. Equity Plus Trend Index (AUSEPTI), the first published active return-stacking index: how the trend overlay is constructed and rebalanced
• How the Direxion U.S. 500 Plus ETF (SPXP) packages this into a single, liquid, 1099-reporting ETF, and where it may fit in client portfolios
• Live Q&A with Direxion's product and alternative investments teams

Accepted for 1 CFP / IWI / CFA CE Credit

Speakers:

Mo Sparks is Direxion’s Chief Product Officer, responsible for leading product development, oversight, and business strategy. Before joining Direxion, Mo was Head of Exchange Traded Products at Raymond James Investment Management, and previously played a key role in growing the ETF business at the New York Stock Exchange, where he advised more than 125 asset managers on market entry.

Earlier in his career, he spent nearly a decade at The Vanguard Group in Global Product Management & Strategy. Mo holds a bachelor’s degree from Clemson University and is a Certified ETF Advisor (CETF^®).

Tim Pickering is Founder/CIO of Auspice and leads strategic decision making and vision for Auspice’s diverse suite of rules-based quantitative investment strategies. Prior to forming Auspice, Tim was VP Trading at Shell and began his career at TD Securities in their elite trading development program ultimately holding the Senior PM position for the Energy Derivatives portfolio.

Outside of Auspice, Tim has been involved in grain farming, is the Chairman of the Finance Advisory Council at the University of Calgary Haskayne School of Business, and past President of Pheasants Forever, a globally respected habitat organization. Tim can be found as a featured speaker on globally respected podcasts including The Meb Faber Show and Top Traders Unplugged, and was named as one of Alberta’s 50 most influential people by Alberta Venture.