Resolve Riffs Investment Podcast
Carry Analysis - Small vs Large Universe
Apr 7, 2025
Dive into the fascinating world of carry strategies as an expert unravels the dynamics of yields across diverse asset classes. Discover the stark differences between highly liquid markets and a broader selection, revealing intriguing performance divergences. With detailed statistical analyses and historical patterns, the discussion sheds light on how soft commodities impact returns. Tune in for insights into long-term investment strategies and the potential for market reversals amid current challenges.
14:25
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Quick takeaways
- The podcast discusses how a multi-asset carry strategy can leverage futures trading to identify high-performing markets amidst varying liquidity levels.
- It highlights the historical patterns of divergence and reversion in carry strategy performance, suggesting temporary market challenges are cyclical rather than structural.
Deep dives
Understanding Carry Strategies
Carry is defined as the expected return on an investment if prices remain stable, acting as a yield equivalent to interest payments in bonds or dividends in stocks. The episode highlights how a unique multi-asset carry strategy utilizes futures trading based on these signals to anticipate which markets will outperform. By going long on high carry markets and short on negative carry ones, this approach has historically yielded positive returns across various market conditions. It stands out as a complementary strategy alongside other alternatives, remaining a valuable tool for investors.
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