I was reviewing my notes and I found this paper on managed futures: https://www.aqr.com/Insights/Research/White-Papers/Trend-Following-in-Focus
The paper has a section on why they don’t think managed futures (a.k.a. trendfollowing) will stop working in the near future. Here’s the summary I wrote in my notes (of the relevant section):
Assets invested in trendfollowing peaked in mid-2008 at $210B, and have declined to $120B
All systematic hedge fund strategies have $500B AUM, or 17% of all hedge fund assets
Futures market has grown since 2008, so trendfollowing as a % of futures markets has decreased by more than half
I don’t find this super convincing, it’s definitely still conceivable that trendfollowing strategies could basically stop working, but it’s evidence that trendfollowing is not over-subscribed.