Trend-Following: Why Now? A Macro Perspective
November 16, 2022
Trend following is having a banner 2022 amidst a year of turmoil for traditional portfolios, but investors exploring an allocation to trend-following may be wondering if they are “late to the trade,” while also anchoring their expectations to the lean 2010s. We show that both the macroeconomic picture and empirical evidence suggest that strong performance for trend-following may persist, making it a potentially valuable source of diversifying returns during a challenging time for the rest of investors’ portfolios.
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Trend following strategies have a track record of delivering strong long-term returns and diversifying performance during downturns for traditional assets – when investors may need it the most. Explore our research explaining how trend following could be incorporated into a portfolio and demonstrating its ability to generate strong performance across time and asset classes.
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Rapid economic growth accompanied by large increases in prices for many goods and services has led to unusually high level of uncertainty around inflation. This may prompt investors to question how different inflationary outcomes can impact their portfolio and what they can do to reduce their portfolio's sensitivity. To address investors' questions, we have rounded up some of our best thinking on the topic.
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Value investing – buying securities that appear cheap relative to fundamentals – has a long history in financial markets. Explore our library of research on this famed topic.
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Diversification. Craftsmanship. What goes into building an effective portfolio? We’ve rounded up our best thinking on the topic.
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Factor/Style Investing
Uncorrelated Assets: An Important Dimension of an Optimal Portfolio
January 12, 2023
Recently, Dimensional Fund Advisors wrote critically on “liquid alts.” They make some good points, but they also draw some odd conclusions that if applied more generally would not be to their or our liking. Besides discussing their piece, below I also review the general rationale behind holding uncorrelated assets – in particular, equity “factors” held in a long-short manner.
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