Gerald Rushton, senior member of the QIS Structuring team at Macquarie Bank, shares insights on commodity strategies, including trend following, commodity carry, congestion, and volatility carry. He discusses the advantages of QIS desks, customization of mandates for clients, and the importance of understanding different types of trend following strategies. He also delves into commodity congestion strategies, the potential returns they offer, and the decision to use the death card as a symbol for quant investing.
Commodity strategies like trend following, commodity carry, congestion, and commodity volatility carry can complement equity hedging strategies and provide unique edges.
Quant investing is often misunderstood and seen as unpredictable, but it is actually data-driven and evidence-based, emphasizing the need to demystify and promote better understanding of quant strategies.
Deep dives
Commodity Strategies: Trend Following, Carry, Congestion, and Volatility Carry
In this podcast episode, Gerald Rushton, a senior member of the QIS structuring team at Macquarie Bank, discusses various commodity strategies. He explains that trend following, commodity carry, congestion, and commodity volatility carry are all effective strategies. Rushton argues that these strategies can complement equity hedging strategies and provide unique edges. He emphasizes the importance of understanding market structure, fundamentals, and seasonality when implementing these strategies. Rushton also touches on the importance of customization and innovation in quant strategies, as well as the resurgence of FX Carry strategies. Overall, the podcast sheds light on the potential benefits and considerations of different commodity strategies.
The Misunderstood Strategies: Death of Misconceptions
In this podcast episode, Gerald Rushton explores the misconceptions surrounding quant investing and the benefits it offers. He draws parallels to the tarot card 'Death' to symbolize the misunderstood nature of quant strategies. Rushton explains that quant investing is often seen as unpredictable or random, but in reality, it is data-driven and evidence-based. He emphasizes the need to demystify and promote better understanding of quant strategies. Rushton also discusses the shift from traditional investment approaches to new ways of thinking supported by evidence. Overall, the episode highlights the importance of overcoming misconceptions and embracing quant strategies as a valuable investment approach.
Customizing Commodity Strategies for Optimal Returns
Gerald Rushton, a senior member of the QIS structuring team at Macquarie Bank, discusses the potential of customizing commodity strategies in this podcast episode. Rushton emphasizes the importance of collaborating with clients to design customized strategies that align with their objectives. He explains that strategies like trend following, commodity carry, and congestion can be tailored to specific needs and preferences. Rushton highlights the value of incorporating fundamental insights and market structure knowledge into strategy design. He suggests that customizing commodity strategies not only enhances outcomes for clients but also helps manage risks and avoid duplicating exposures. The episode provides insights into the benefits and considerations of customization in commodity strategies.
The Resurgence of FX Carry Strategies
Gerald Rushton discusses the revival of FX Carry strategies in this podcast episode. He explains that these strategies, which involve selling options with high implied volatility and capturing the spread, are making a comeback due to increased carry opportunities as central banks raise interest rates. Rushton emphasizes the importance of adjusting portfolio construction techniques to avoid excessive equity beta exposure and optimize alpha generation. He also highlights the role of fundamental insights and market seasonality in FX Carry strategies. The episode sheds light on the recent performance and potential benefits of FX Carry strategies within the current market environment.
In this episode I speak with Gerald Rushton, senior member of the QIS Structuring team at Macquarie Bank.
Our conversation largely revolves around commodity strategies, including thoughts on trend following, commodity carry, commodity congestion, and commodity volatility carry. Gerald argues that the latter three are particularly well suited to be paired with equity hedging strategies, and we spend quite a bit of time discussing the major design levers behind each strategy.
Gerald also provides some insight as to how QIS desks have evolved over the past decade, why he believes QIS desks can provide unique edge, and the many ways in which they can customize mandates for clients.
Please enjoy this conversation with Gerald Rushton.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
