SI261: The Biggest Story in Asset Allocation ft. Nick Baltas
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 16 September 2023
⏱️ 59 minutes
🧾️ Download transcript
Summary
Today Nick Baltas and I embark on a journey through the shifting tides of investment strategy. For decades, equities have reigned supreme as the primary source of portfolio returns, while bonds played a crucial role as diversifiers. But over the past two decades, something intriguing has happened, and the dynamic between these two asset classes has evolved in ways we've never seen before. Stay tuned as we unravel the fascinating story of this transformation and explore what it means for modern investors. We also discuss what a leading Trend Follower describes as what really determins absolute returns in a trend following strategy...and you may be surprised of what it is.
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Episode TimeStamps:
01:07 - What has caught Nick's attention recently?
03:02 - Industry performance update
04:30 - Q1, Corey: If an investor is heavily weighed equities, are they better off with trend following providers that don't include equities as one of the utilized asset classes
10:31 - How model portfolios can benefit from trend following
19:02 - A Changing Stock-Bond Correlation (AQR Paper)
23:50 - How structural inflation can impact the stock-bond correlation
27:46 - Illiquid alternatives and commodities as diversifiers
35:27 - Significant shifts in the asset allocation space
38:14 - Is cash better than bonds?
41:40 - Paper from Transtrend
47:15 - What really drives the absolute return in a trend...
Transcript
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| 0:00.0 | You're about to join Neil's Kostrup Larson on a raw and honest journey into the world of systematic investing |
| 0:07.2 | and learn about the most dependable and consistent yet often overlooked investment strategy. |
| 0:13.2 | Welcome to the Systematic Investor Series. |
| 0:26.4 | Welcome and welcome back to this week's edition of the Systematic Investor series with Nick Baltas and I, Neil's Kasblassen, |
| 0:28.9 | where each week we take the polls of the global markets |
| 0:30.9 | through the lens of a rules-based investor. |
| 0:34.4 | Nick, it is great to be back with you this week. How was your summer? Hopefully not too |
| 0:39.5 | hot where you went. My summer was good. Hi, Niels. I was in Greece. Obviously, Greece was very |
| 0:45.6 | warm. It was not as hot as it was in July. I happened to be in London at the time. |
| 0:51.4 | But it was beautiful. Family, friends, you know, some summertime, |
| 0:55.5 | island life. It's beautiful. How about yours? |
| 0:58.4 | Sounds, yeah, sounds pretty nice. Yes. So I've just been sort of a in and out between |
| 1:03.2 | Denmark and Switzerland this year, but it's been pretty good as well. Can't complain. |
| 1:07.6 | Now, we've got a pretty solid lineup of topics that you brought along, and we also have a question |
| 1:14.9 | that we should tackle today. Before we do that, you know, often, or not often, I actually always |
| 1:22.6 | try to remember to ask you kind of what's been on your radar, not related to the topics we're |
| 1:28.1 | going to talk about, but kind of other things that you have found interesting in the last few |
| 1:32.1 | weeks since we last spoke. Anything springs to mind at the moment for you? I mean, obviously, |
| 1:37.3 | September came back. We came back from holidays and we know we start seeing increased activity |
| 1:43.0 | as our clients get positioned |
| 1:46.2 | towards the end of the year. |
| 1:47.9 | I would say the optimism and the kind of risk-gone mood we saw in the earlier part of the |
... |
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