Understanding Financial Markets: Risk Transfer vs. Capital Formation

In this episode of Excess Returns, Matt Zeigler and Jason Buck sit down with Eric Crittenden, CIO of Standpoint Funds, for a wide-ranging and candid discussion about trend following, risk transfer markets, and what it takes to build a resilient investment strategy for uncertain futures. Eric shares decades of hard-won insights on investor behavior, portfolio construction, performance pain points, and why blending passive equities with systematic macro might just be the future of asset allocation.

🔍 Topics Covered:

• The uncomfortable realities of trend following performance

• Why many investors misunderstand managed futures

• Eric’s view on the current drawdown and client behavior

• Setting expectations with empirical data and simulations

• The case for blending passive equities with trend following

• Capital formation vs. risk transfer markets explained

• What market participants get wrong about futures

• The surprising resilience of cap-weighted equity indexes

• The flaws in relying on bonds as diversifiers

• How regime shifts and correlation changes affect trend models

• Philosophical take on risk, regulation, and structural market design