SI24: Why Trend Following has "failed" to attract a lot of Assets ft. Meb Faber

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 24 February 2019

⏱️ 94 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Meb Faber joins the show to discuss his journey into Trend Following, where Trend Following funds have gone wrong in terms of attracting assets & growing AUM, why he started his company Cambria Investments and the difficulties that this involved, the perceived safety of US Treasuries, Mutual Funds vs ETFs, and a lot more.

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Episode TimeStamps:

00:00 – Intro

01:30 – Weekly review of performance

06:25 – Meb's backstory

10:15 – Jerry question: Why don’t CTAs have more AUM?

16:50 – Moritz question: When and why did you start your firm?

21:00 – Moritz question: Why do you think TF and value is a great blend?

28:00 – Niels question: Please talk about the perceived safety of US Treasuries (based on your research) and why you use a broader portfolio.

36:20 – Niels question: What needs to happen before Betterment (and others) embrace TF?

40:15 – Moritz question: Why did you set up an ETF vs a mutual fund or another vehicle?

50:00 – Jerry question: What needs to happen for mutual funds to be competitive with ETFs (tax wise)?

53:00 – Niels question: With ETFs do you have to disclose your trading methodology?

57:00 – Jerry question: What do you think of products designed for client desires/tolerances compared to optimally designed pure TF products?

01:02:30 – Jerry question: What is your opinion on active mgt = discretionary & index = systematic?

01:12:30 – Niels questions: What are your favorite factors? How is your competition

Transcript

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0:00.0	You're about to join Jerry Parker, Moritz Siebert, and Nealz Kastrup Larson on their raw and honest journey into the world of systematic investing and learn about the most dependable and consistent yet often overlooked investment strategy.
0:15.0	Welcome to the Systematic Investor podcast series.
0:19.5	Jerry Parker, Moritz Siebert, and, Neels Kassel Blasen,
0:22.6	are back with this week's edition of the Systematic Investor Series,
0:26.0	which is our weekly ongoing raw exploration of the world of rules-based investing,
0:30.7	and of course, where we take some of your questions.
0:33.3	But today, we are going to deviate a little bit from the usual format because we are delighted to be joined by a very special guest, namely the one and only, Mep Faber, who I'm sure many of you already know from his great podcast and blog. So Mep, welcome to the show. And of course, as usual, good morning, Jerry, and good afternoon to you, Moritz.
0:54.0	Hi, Neels. Hi, Mep. Hi, Jerry jerry great to be here no better way that i'd rather spend my saturday
0:59.6	chat with you guys all over the world absolutely technology is wonderful as long as it works
1:05.7	but it's great to have you with us today we have a lot of things we want to dive into and also from sort of the part of the systematic
1:14.8	world and approach that you bring.
1:17.8	But before we do that, we normally just do a quick review of the past week from the lens
1:22.3	of a trend follower.
1:23.8	So while you might have an extra cup of coffee, I'm just going to quickly go through our normal little routine.
1:29.9	And so Moritz, as you always are the one who kicks off this little part of our conversation.
1:38.0	How was your week? What happened? There was a few. I did see that there was a few reasonable market moves in the commodity sector.
1:45.0	In particular, Leanhawks had a big down move this week and on the upside we saw moves in copper, platinum, palladium and some of the energy markets.
1:54.0	Fixed income continues their march north and of course the stock markets in the US.
2:00.0	They saw the S&P make new 2019 high so
2:04.4	how did that all play out on your side more it's yeah so once again you want to start me with
2:09.1	the negative news huh so maybe at the point we have to change a journey to start but um it's a real bummer
2:14.6	another you know 2% down this past week, mainly driven by the energy moves.
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