In this episode, Rodrigo Gordillo, Mike Philbrick, and Adam Butler explore the timely relevance of managed futures, examining why the current macroeconomic environment may be particularly favorable for these strategies. They discuss recent drawdowns, the uncorrelated nature of trend and carry strategies, and the importance of diversification. The conversation also covers the benefits of strategic overlaying in portfolios, the impact of policy shocks, and the potential for managed futures to add value in various market conditions, including inflationary periods.

Topics Discussed

• The recent, challenging drawdown period for both trend and carry managed futures strategies

• Behavioral hurdles of investing in strategies that hit new highs infrequently, leading to investor fatigue

• The strong macro case for diversification due to concentrated U.S. equity portfolios and potential inflation

• The physical resource demand from the AI boom creating potential trends in commodities and energy

• The role of managed futures in capturing global trends beyond commodities, including international equities and currencies

• The argument that the fundamental drivers for trend and carry remain intact despite recent performance

• Utilizing Return Stacking to reduce tracking error and make it easier to hold diversifiers long-term