The VUCA World Is Here | Systematic Investor | Ep.398

Summary

The video discusses investing in a VUCA world defined by volatility, uncertainty, complexity, and ambiguity. Mark Raspinski explains why geopolitical supply shocks create persistent trends beneficial for trend-following strategies, and presents research showing managed futures are uniquely invariant to risk regimes compared to other hedge fund strategies.

• Mark and Niels introduce the concept of a VUCA world and uncharted territories in markets.
• Trend-following strategies have performed well in April despite strong equity markets.
• Supply shocks, like the Middle East oil disruption, are harder for central banks to manage and sustain trends.
• Mark's research shows managed futures are insensitive to volatility regimes, unlike many hedge funds.
• The conversation covers AI's potential use in sentiment analysis and replication of hedge fund strategies.
• Niels notes that CTA fixed income positioning has shifted to short, reflecting bearish bond views.
• Mark questions whether equity markets are properly discounting geopolitical risks, citing low VIX.
• The episode closes with a discussion on pure vs. multi-strategy approaches and bundling of risk premia.