Differences in managed futures traders - not all trend-followers

All CTA managers are not created equal. There is more to this strategy space than just trend-following although trend-followers represent the majority of the assets under management. A recent study earlier this year by SocGen looked at the correlation across a number of managed futures strategies and found there is strong variation in their return behavior over a fifteen year test period. The managers that specialize in a specific asset class will have lower correlation with other managers only because it is less diversified than most trend-followers. For those managers that may have a diversified portfolio, quantitative macro is the least correlated with trend-followers.

The volatility of these CTA strategies will also be markedly different. Trend-followers will be the second most volatile strategy next to commodities. Of course, commodities are more volatile than financial markets given the high underlying volatility, and as a strategy focused on one asset class, it will be less diversified. The best returning category is the diversified technical group which can have both trend and counter-trend components. The second highest return strategy is trend-following. 

A broad set of different strategies are available in managed futures and may offer as much or more diversification as managers within another hedge fund strategy.