Today, we are joined by Kevin Cole, CEO and CIO at Campbell & Co, for a conversation on their approach to using trend following in their trading, with a focus on absolute return. We discuss their investment philosophy and the evolution of their expanded trading strategy, how they moved beyond pure trend using equities and how they use a multi-strat approach to stay diversified. We also discuss how they feel about being replicated and how they use their research process to keep an edge over their competitors, how they capture the underlying momentum factors of trend and how they implement ESG in their trading strategy. Lastly, we discuss how they approach risk management and position sizing, their view on capacity and fees in the industry and much more.
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Episode Timestamps:
02:07 - Introduction to Campbell & Co
03:53 - Their investment philosophy
06:07 - The objectives of their work
08:37 - Moving beyond trend following
12:27 - Their approach to trading equities
15:11 - Staying diversified
19:59 - Using constraints
21:54 - Thoughts on replication
26:45 - What is a good research process?
31:46 - Balancing the adaptability
36:23 - Trading more markets = better?
41:47 - Dealing with ESGs
47:02 - Their risk management process
51:46 - Being discrete
56:19 - Static or dynamic position size?
59:35 - Capacity in the industry
01:04:27 - Advice on return expectations
01:07:11 - Vanilla vs. sophisticated trend follower
01:09:29 - Managing cash
01:11:07 - What do you disagree with the most?
01:12:07 - Expectations for 2023
01:12:57 - Thanks for listening
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