Andrew Beer, managing over a billion dollars at Dynamic Beta Investments, dives into managed futures and their potential for portfolio diversification. He discusses the misconceptions surrounding these strategies and the challenge of getting investors on board despite their benefits. The conversation highlights the importance of clear communication, simplicity over complexity, and adapting to market conditions. Andrew also touches on the evolving ETF landscape and the role of AI in investment management, offering insights valuable to both professionals and individual investors.
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volunteer_activism ADVICE
Explain Managed Futures Benefits
Focus on what managed futures does for a portfolio rather than its mechanics.
Explain its benefits in bear markets and its ability to limit drawdowns.
insights INSIGHT
Narrative over Numbers
Investors choose investments based on narrative and feeling, not just performance.
Managed futures lacks a compelling narrative, hindering its adoption despite its statistical benefits.
question_answer ANECDOTE
Dad's Managed Futures
Jack Forehand tried explaining managed futures to his dad, focusing on its protective qualities.
He believes the term "managed futures" itself might be a barrier to understanding.
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In this book, Daniel Kahneman takes readers on a tour of the mind, explaining how the two systems of thought shape our judgments and decisions. System 1 is fast, automatic, and emotional, while System 2 is slower, effortful, and logical. Kahneman discusses the impact of cognitive biases, the difficulties of predicting future happiness, and the effects of overconfidence on corporate strategies. He offers practical insights into how to guard against mental glitches and how to benefit from slow thinking in both personal and business life. The book also explores the distinction between the 'experiencing self' and the 'remembering self' and their roles in our perception of happiness.
In this episode of Excess Returns, hosts Justin and Jack sit down with Andrew Beer of Dynamic Beta Investments to explore the fascinating world of managed futures and alternative investment strategies. Andrew, who manages over a billion dollars in assets, shares valuable insights on why managed futures remain underutilized despite their proven benefits for portfolio diversification.
The conversation dives deep into several key topics:
How to effectively communicate complex investment strategies to clients
Why the narrative around managed futures is just as important as their performance
The challenges of getting investors to adopt alternative strategies despite their clear statistical benefits
How Dynamic Beta replicates hedge fund strategies in a cost-effective ETF wrapper
The importance of simplicity in investment strategies and why complexity isn't always better
Andrew also discusses the evolution of the ETF landscape, the role of artificial intelligence in investment management, and why maintaining a steady, unchanging strategy has been crucial to his firm's success. Whether you're an investment professional or individual investor, this discussion offers valuable perspectives on portfolio diversification and the future of alternative investments.
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