The performance of the AGFiQ U.S. Market Neutral Anti-Beta Fund, known as BTAL, raises important questions for investors as they consider their strategies for 2026. The fund, designed to profit from market volatility by taking long positions in low-beta stocks and short positions in high-beta stocks, had a challenging performance in recent years. In 2022, BTAL gained 19% while the S&P 500 fell 18%. However, in stark contrast, the fund lost 22.8% in 2025, even as the S&P 500 gained 17.2%. Over the past decade, BTAL has declined 23% while the S&P 500 has surged an impressive 241%.
Understanding BTAL’s Strategy and Recent Performance
BTAL aims to offer portfolio insurance during periods of broad market stress. The fund targets low-beta stocks—those expected to be less volatile—and shorts high-beta stocks, betting that these defensive positions will outperform during market downturns. The fund’s expense ratio stands at 1.40%, which some investors view as a notable cost.
Despite its strategy, BTAL’s performance has been inconsistent. In 2025, the fund’s decline highlighted a critical limitation: it performs best when market conditions favor defensive stocks. The significant 40-percentage-point gap between BTAL’s performance and that of the S&P 500 in 2025 underscores this issue. For many investors, holding BTAL has resulted in an opportunity cost of 264 percentage points over the past ten years when compared to the S&P 500.
While BTAL can provide genuine diversification during market stress, the challenge lies in timing. The fund performed admirably in 2022 but struggled significantly in 2025. As the S&P 500 has seen three consecutive years of positive returns, forecasts for 2026 suggest a more cautious outlook.
Market Forecasts and Investment Considerations
Investment firms have differing views on the equity market for 2026. Vanguard’s outlook anticipates mid-single-digit returns, citing elevated valuations, while BlackRock predicts that US equities will outperform their global peers again. Conversely, JP Morgan expects slower growth but does not foresee a recession.
Given these perspectives, the question arises: Is it prudent to hold BTAL in 2026? If one believes there is a significant chance—perhaps 20% or greater—that the S&P 500 may experience a downturn, then BTAL could serve as a valuable insurance policy in a diversified portfolio. Yet, for those who align with the more optimistic forecasts, BTAL may represent a stagnant investment.
Despite its recent poor performance, some investors argue that BTAL’s fundamental strategy remains intact and worth maintaining. The balance between risk and potential reward will be crucial as investors navigate their options ahead of 2026.
In conclusion, while BTAL has faced challenges, its role as a potential hedge in times of volatility cannot be overlooked. Investors should carefully evaluate their risk tolerance and market expectations when considering the fund’s place in their portfolios.
