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Innovation Against All Odds: The Trailblazing Launch of TFPN by Blueprint and Chesapeake
Following the successful launch of TFPN, the financial landscape experienced a notable shift. For the first time ever the concept of trend following was applied to both commodities and single stock equities. The innovative fusion of commodity trading assets and equity long-short positions set a new standard for ETFs, challenging conventional norms and inspiring further creativity in the financial industry.
Tidal’s ability to navigate complex regulations and market hesitations underscored the potential for bold ideas to reshape the investment landscape, leaving a lasting impact on how investors approached multi-asset strategies.
On July 11, 2023, Blueprint-Chesapeake unveiled a groundbreaking financial product: the Multi-Asset Trend ETF, known as TFPN, which stands for Trend Following Plus Nothing.
This innovative ETF was spearheaded by Jerry Parker, the founder of Chesapeake’s Capital, who was trained under the legendary “Turtles” Bill Eckhardt and Richard Dennis. The Turtles, as they were known, were pioneers in trend following, a strategy involving small bets that consistently yield profits over time. In the early 2000s, Chesapeake had emerged as the largest Commodity Trading Advisor(s) in the market.
The significance of the TFPN launch lies in its departure from conventional trends in the world of finance. Unlike traditional CTAs that primarily dealt with commodities, TFPN expanded the horizon by incorporating single stock equities alongside futures. This unique portfolio composition comprised of 50% Managed Futures and 50% Equity Long Short positions; a blend that had never been attempted before, inside the ETF wrapper.
Commodity ETFs are a rarity in the financial landscape, and Equity Long Short ETFs are equally scarce. The fusion of these two components was unprecedented, marking a pivotal moment in the industry.
Tidal Financial Group, a driving force behind this venture, was motivated by the belief that any innovation within the boundaries of regulations was possible. However, the journey towards launching TFPN was not without its challenges.
Four major hurdles stood in the way:
Derivative Risk Management Program
Regulatory Complexity (CPO/CTA)
Lead Market Maker (LMM)
Despite these hurdles, Tidal’s determination and expertise prevailed. The launch of TFPN unlocked a unique investment opportunity and also showcased the industry’s ability to innovate within the regulatory confines. Tidal’s success in overcoming these challenges underscored their commitment to pushing the boundaries of traditional finance, paving the way for future financial innovations.