Patrik Säfvenblad, Jukka Harju, and the broader team at Volt Capital Management have successfully managed their fundamental systematic macro strategy since its launch in early 2017. Designed to serve as a diversifier within investor portfolios, the strategy has consistently delivered during risk-off periods – most notably gaining 41 percent in 2020 and 8 percent in 2018. With both Säfvenblad and Harju having roots in systematic trend-following – Harju previously served as a quantitative researcher at Lynx Asset Management – Volt has now launched a standalone trend-following program. The new strategy is designed not only to complement Volt’s flagship macro program but also to offer institutional investors an additional, differentiated source of diversification.

“Both Jukka and I have been working with trend-following for as long as we can remember,” says Säfvenblad, noting Harju’s experience at Lynx Asset Management. However, Säfvenblad is quick to emphasize that “what we’re doing here with the Volt Trend Program bears no resemblance to what Lynx is doing – in terms of models, timeframes, or approach.” While the founding team at Volt initially chose to focus on their systematic macro strategy – “that was a niche where we felt we could offer something genuinely different,” says Säfvenblad – the trend-following project “has always been there on the side, sitting on the shelf.”

A Distinct Complement to Trend-Following Peers

The Volt team designed the Volt Trend Program not only to complement its own macro strategy but also to stand alongside existing trend-following strategies in the Nordics. “What we do in macro is a good complement to trend following and vice versa,” says Säfvenblad. More importantly, he adds, “the reason we’re launching this is because we believe we’re offering something that – while ‘unique’ is often overused – is certainly distinct.” According to Säfvenblad, “it’s a trend-following program with characteristics you will typically not find among other managers.”

“What we do in macro is a good complement to trend following and vice versa.”

While both the time-tested Macro Program and the newly launched Trend Program are designed to serve a diversifying or protective role in investor portfolios, they are built to be fundamentally uncorrelated and complementary. “The two programs have very low correlation,” says Säfvenblad, noting that both backtests and live performance show a correlation of approximately 0.2. “That stems from the fact that they rely on completely different sets of signals,” explains Volt’s Chief Investment Officer.

“Trend following, in some sense, is about following the market, looking at what has happened and positioning accordingly. The Macro Program, by contrast, is much more about forecasting – anticipating where the market is headed based on underlying drivers.”

“Trend following, in some sense, is about following the market, looking at what has happened and positioning accordingly,” explains Säfvenblad. “The Macro Program, by contrast, is much more about forecasting – anticipating where the market is headed based on underlying drivers.” May offered a clear illustration of this difference: the Macro Program was long oil, while the Trend Program was short the same instrument. “These are two distinct ways of interpreting the market,” says Säfvenblad. “Each is valid within the context of its own strategy.”

What Sets the Volt Trend Program Apart?

There is a broad universe of trend-following managers offering different shapes of trend-following exposure, varying by the range of instruments and markets traded, the models employed, time horizons, and other design choices. While all aim to deliver diversification, crisis alpha, or downside protection, their approaches and styles can differ significantly. Volt Capital Management has designed its Trend Program to complement the existing lineup of Nordic and global trend-following strategies. “It’s a trend-following program with certain characteristics you won’t find at the average trend-following manager,” reiterates Säfvenblad.

“It’s a trend-following program with certain characteristics you won’t find at the average trend-following manager.”

At the core of the strategy design, the Volt team aimed to tackle two common challenges faced by traditional trend-following approaches: “whipsaw losses, i.e., getting chopped up during directionless markets” and suffering correlated losses in sharp market reversals. Säfvenblad explains that the first issue – being chopped up – is where machine learning truly adds value, while the second – correlated losses – is mitigated through broad diversification across instruments and markets, especially within the extensive and varied commodity sector.

Compared to a typical trend-following program, the Volt Trend Program differentiates itself along three key dimensions: speed, diversification, and tighter risk management. “We definitely run faster models than average,” Säfvenblad begins, noting an average holding period of around 20 days. “Second, we’re more diversified than most, particularly with a heavier allocation to commodities,” he adds. While commodities are “just as trend-friendly as financials – neither better nor worse,” Säfvenblad explains, maintaining roughly equal weights between commodities and financials “significantly helps reduce stress losses during sharp sell-offs.”

“Trend following tends to be more diversified during upward moves than in sell-off episodes,” argues Säfvenblad. By including exposure to soft commodities such as grains, cotton, and others – which generally exhibit low correlation both among themselves and with broader markets – the Volt Trend Program aims to “reduce the likelihood of very large drawdowns.” “Crude oil behaves differently from heating oil, and metals differ from energy commodities,” he notes, emphasizing that “our goal is to achieve maximum diversification. While trend-following in equities can be highly volatile, recoveries in equity markets often generate “more tradable trends in the commodity space,” offering a valuable secondary source of trends that helps capture equity market momentum without direct equity exposure.

The third key differentiator of the Volt Trend Program is its tighter risk management compared to the average trend-following strategy, Säfvenblad explains. “With greater exposure to commodities, we aim to achieve more stable risk-taking, which allows us to maintain a lower maximum risk.” The objective is to avoid the pattern of strong gains followed by steep losses. “Our risk management is closely tied to this approach, and it’s supported by the program’s diversification – with a wide range of traded markets, there are always some new emerging trends we can seek to capture.”

“With greater exposure to commodities, we aim to achieve more stable risk-taking, which allows us to maintain a lower maximum risk.”

The importance of diversification and disciplined risk management stems from the team’s long experience managing the Volt Macro Program. “Trying to be as diversified as possible really helps during stress periods,” Säfvenblad emphasizes one lesson from running the existing Macro Program. “The other part is about not being overconfident in your risk-taking – just because you made money yesterday doesn’t mean you’re more likely to make money tomorrow,” he explains. “Nor does it mean you’re less likely. The key is to remain cautious and maintain stable risk-taking.”

A Focus on Quality Over Capacity

The ability to run faster models and place greater emphasis on commodities offers clear benefits to investors but comes with a trade-off. “The price we pay is lower capacity,” explains Säfvenblad. “We are not focused on maximizing capacity; instead, our priority has been to create the best, most diversified product possible.” The Volt Trend Program targets a minimum capacity of one billion U.S. dollars. “We designed this product with an emphasis on balancing speed and market diversification, and we intend to stay true to that commitment.”

“We designed this product with an emphasis on balancing speed and market diversification, and we intend to stay true to that commitment.”

While the Volt Trend Program is a newcomer in the trend-following space, it is by no means inexperienced. “Building a trend program involves much more than just generating a set of trend signals,” says Säfvenblad. “You also need to execute trades effectively – getting in and out at the right time and price. Having around eight years of actual trading experience makes a significant difference,” he explains. “On the machine learning side, multiple iterations have refined our signal weighting processes.” Overall, “the risk management and execution tools we employ all contribute substantially to the effectiveness of the trend program.” 

For Volt, launching a trend-following program wasn’t about adding another product to a crowded space – it was about building a distinct one, and hopefully a better one. Backed by years of real-world trading experience, a differentiated design, and a clear focus on quality over scale, the Volt Trend Program reflects a clear ambition: to follow trends differently – and do it well.

This article features in the “Systematic Strategies and Quant Trading” publication below: