MW How this top-performing trend-following manager got ahead of the Iran conflict and a software rout

By Barbara Kollmeyer

Longboard Asset Management tries to capture the waves, avoiding the wipeouts

Longboard Asset Management has been riding out AI and geopolitical waves for years.

As the Iran conflict drags into its fifth day, many investors already weary from AI anxiety this year will stay glued to their screens.

For Longboard Asset Management those headlines have long been accounted for, and dismissed. The alternative fund manager's trend-following strategy collects stock market data from every publicly traded Russell 3000 company, measures trends and then acts on them. Chief investment officer Cole Wilcox calls it capturing the "waves that markets are constantly supplying."

"But you've got to avoid the wipeouts and you've got to be positioned at all times for the next wave coming, and it's a never-ending process," he told MarketWatch in an interview on Monday.

He said the Middle East headlines are playing into well-established trends in favor of industrials and military contractors. His strategy started flagging those companies when Russia invaded Ukraine in 2022, and that accelerated with post-COVID reshoring.

The $110 million Longboard mutual fund LONGX includes holdings such as freight and rail supplier Wabtech $(WAB)$ and electricity provider Entergy $(ETR)$, both of which have been climbing since 2024, Morningstar data shows.

Longboard aims to offer "low correlation to traditional buy-and-hold strategies, providing meaningful diversification," and he says they uniquely apply that to individual stocks. Most such strategies focus on commodities or futures.

"And that's also why our fund is the number one performing fund in its category," said Wilcox. Its benchmark is the SG Trend Index, which tracks performances of the ten-biggest trend-following CTA managers open to new investments.

The Longboard fund's prospectus shows a gain of 7.86% versus 2.38% for SG Trend over three years, up 4.6% versus 8.1% over five years and a gain of 7.8% versus 3.79% on a 10-year basis. This chart from Wilcox shows how it has performed versus the Russell 2000 index during times of extreme market stress.

His career start in 1997 gave him a front-row seat to boom-and-bust cycles, and he wanted to find a way to smooth those out.

Longboard's clients have also sidestepped the recent software slump - Wilcox says they've been underweight the sector since 2022. His strategy spotted sector trouble in 2021 and 2022, as a very low interest rate environment started to reverse, which tends to negatively affect growth stocks, he said.

Many companies in the small-cap space didn't recover, and last year they saw smart money exit those stocks, he said. That sent the message that software wasn't going to be as profitable as in the past due to what agentic AIs were creating for free, he said.

What else are Longboard's algos telling him to buy? "The biggest general theme in the portfolio is the relative strength in financials" that are telling a story opposite to software, he said.

"I think the market is saying these financial companies are going to be the biggest benefactors of AI," with margin and operational efficiency improvements, he said.

The other big theme is industrials - alive-and-well U.S. onshoring and data-center building. He said they picked up EchoStar $(SATS)$ last year as a play into SpaceX. They also bought Bloom Energy $(BE)$, which has been a powerful player on the need for energy to run AI.

Wilcox said the Longboard fund will go to 100% Treasury bills if every stock is in a negative cycle, as it nearly did during COVID.

"Our first priority is playing great defense. The second priority then is to put returns on top of that defense so that your offense is superior to other comparable kind of investments," he said.

The markets

U.S. stock futures (ES00) (YM00) (NQ00) are higher, along with oil (BRN00) (CL.1) Treasury yields BX:TMUBMUSD10Y BX:TMUBMUSD02Y, gold (GC00) and bitcoin (BTCUSD), as the dollar DXY drops. The KOSPI KR:180721 fell 12% in its worst drop since 2008.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              6816.63    -1.07%  -1.46%  -0.42%  17.97% 
   Nasdaq Composite                                                     22,516.69  -1.52%  -3.18%  -3.12%  23.14% 
   10-year Treasury                                                     4.082      3.30    -19.80  -9.00   -19.90 
   Gold                                                                 5176.3     0.30%   4.14%   19.48%  76.76% 
   Oil                                                                  76.66      16.01%  19.97%  33.53%  12.67% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

The New York Times reported an offer for secret talks between Iran and the U.S. as the war continues.

February private-sector payrolls from ADP are due at 8:15 a.m. The Institute for Supply Management services PMI is at 10 a.m., and the Fed's Beige Book of economic conditions at 2 p.m.

CrowdStrike (CRWD) beat revenue forecasts and gave an upbeat outlook, citing more demand for cybersecurity thanks to AI.

Ross Stores $(ROST)$ shares are jumping after an upbeat forecast on sales.

Moderna shares (MRNA) are surging after the pharma said it has reached a deal to resolve a COVID vaccine-related dispute.

Broadcom $(AVGO)$ will report after the close.

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The chart

Near-term risks for global equities are elevated given geopolitics and AI anxiety, but a bear market is not in the cards, say strategists at Goldman Sachs. Their chart of steady earnings upgrades is one reason why. "We see correction risks as elevated, but expect any weakness to be contained given solid growth momentum, resilient earnings revisions and healthy private-sector balance sheets," a team led by chief global equity strategist Peter Oppenheimer told clients in a note.

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   TSM     Taiwan Semiconductor Manufacturing 
   GME     GameStop 
   PLTR    Palantir 
   MU      Micron 
   AMD     Advanced Micro Devices 
   AMZN    Amazon 
   MOBX    Mobix Labs 
   AAPL    Apple 

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BEYOND THE NEWSROOM

MarketWatch Picks: I'm 40, single and make $75K. I own a condo, have $65K saved, but $33K in debt. How am I doing?

-Barbara Kollmeyer

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March 04, 2026 07:07 ET (12:07 GMT)

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