Top Traders Unplugged

SI329: CTAs: Innovation Meets Legacy & the BlackRock Effect ft. Andrew Beer & Tom Wrobel

Jan 4, 2025

Join Andrew Beer, a managed futures expert, and Tom Wrobel from SocGen as they delve into the evolving world of CTAs. They discuss the urgent need to reshape narratives around trend-following strategies for investors. The duo explores BlackRock's new actively managed ETF, examining its potential impact on portfolio allocations. They also touch on innovative ESG-compliant products designed to attract cautious investors. With valuable insights on market adaptation and the future of systematic investing, this conversation is a must-listen.

01:28:14

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Episode guests

Tom Wrobel

Andrew Beer

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

The podcast emphasizes the need for a narrative shift to effectively communicate the value of CTAs and managed futures to investors.

Discussion on BlackRock's actively managed manager ETF highlights its potential to reshape perceptions and allocations of managed futures in investment portfolios.

Emerging replication strategies provide investors a tailored approach to accessing managed futures while addressing specific concerns such as ESG compliance.

Deep dives

Political Influences on Markets

The political landscape in the U.S., particularly the influence of the Trump administration, has been a focal point for investors observing market trends. The shift from traditional political figures to more economically driven billionaires has introduced a new dynamic, affecting investor sentiment and market behavior. This shift has signified a move away from reactionary policies to a focus on forward-thinking agendas, creating uncertainty regarding future economic trajectories. Observations like these underscore the importance of understanding political climates as pivotal factors in systematic investing.

Intro

4min

Navigating Geopolitics and Investment Challenges

6min

End-of-Year Index Performance Insights

20min

Navigating Commodity Trading Advisors

27min

Navigating Short-Term Trading Strategies

19min

Innovative Index Solutions for European Investors

11min

Wrapping Up Insights on the CTA Landscape

2min

Together with Andrew Beer and Tom Wrobel, we dive deep into the evolving landscape of managed futures and CTAs, highlighting the critical need for a narrative shift to better communicate their value to investors. Andrew and Tom discuss the challenges faced by allocators in understanding the unique benefits of trend-following strategies, especially amidst a backdrop of changing market dynamics. They explore the implications of BlackRock's recent move to launch an actively managed manager ETF, which could significantly impact how managed futures are perceived and allocated within investment portfolios. The conversation also touches on the potential for new ESG-compliant products that could attract investors reluctant to engage with traditional commodity exposure. With insights into the current market environment and the importance of adaptability, this episode provides valuable perspectives for anyone interested in systematic investing and the future of CTAs.

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Episode TimeStamps:

01:20 - Our expectations going into 2025

07:00 - What to do when bonds are collapsing

10:21 - Industry performance update

11:49 - A deep dive into indices

17:36 - The mechanisms behind creating an index

23:13 - What returns can you expect from a CTA replication index?

27:21 - What are the average fees in today's indices?

30:31 - The benefits of replication

34:04 - The drivers of replication strategies

40:50 - How CTA replicators handle inflection points

43:11 - What happens to an index if its underlying model changes

50:21 - Do trend followers in general make big changes to their models?

52:30 - How the AUM landscape has evolved

57:06 - Can you replicate a pod shop?

01:03:02 - Why many allocators are missing out on trend following

01:11:57 - What is going on with Blackrock?

01:15:29 - Big news from Andrew

01:21:05 - The challenges of complying with ESG metrics

01:23:58 - It's all about the narrative

01:26:48 - What is up for next week?

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