20 Oct 2026 - Quarterly State of Trend report - Q3 2026

In this update we present the quarterly State of Trend report for Q3 2026.

Our report covers the performance of trend following systems compared with traditional investments such as the S&P/ASX 200 Total Return index, and the Australian 60/40 portfolio. Trend following provides exposure to a diverse pool of underlying instruments, and implements trading strategies systematically and without emotional biases. 

Trend followers pull ahead as the bond sell-off stalls conventional asset classes

• Traditional assets were roughly flat in Q3, as a September sell-off on rising bond yields and oil prices gave back earlier gains

• Trend-following systems outperformed. A broad commodity rally and rising bond yields drove strong gains. Over 12 months, trend systems returned 20-21%, well ahead of the 1-3% from traditional assets

Key market movements in Q3 2026

• Energy markets surged and bonds sold off sharply in Q3, while equities were mixed
  • Bonds fell globally as central banks turned more hawkish. The US Federal Reserve and Reserve Bank of Australia both raised rates in September. US Treasuries posted steep losses, with yields reaching highs not seen since 2007. European government bonds also sold off, led by France, and Australian bonds slipped
  • The S&P 500 extended its gains, while Australian equities were broadly flat after a weak September. North Asian markets were volatile, and small caps lagged as rates rose

• Energy led commodities higher

  • Crude Oil and other energy markets rallied strongly as the US-Iran conflict escalated

  • Copper and Gold also gained, while Silver edged higher

  • Grains and Oilseeds performed strongly through the quarter, led by Oats, Rice and Soybean Meal. Selected Food and Fibre markets also rallied, such as Sugar and Rubber

• Trend-following strategies benefited from diversified exposures, outperforming traditional asset classes

Featured chart - UK Natural Gas

• UK Natural Gas was one of the strongest performers in Q3, rising 75.3%. It is now up 134.1% over the past year. The rally followed a sharp fall in Q2, as the US-Iran conflict escalated and pushed global energy prices higher
• Continental European gas followed a similar path, with Dutch gas up 66.5% for Q3. US gas fell over the same period, showing how regional supply conditions can drive very different outcomes
• Commodity markets can move quickly and sharply, often on news that is hard to predict. This is where a systematic approach helps. A rules-based process enters trends as they form and has built-in risk controls for volatile periods

See the full report at our website.