Featured Insights

Research and Publications

INSIGHTS
by First Quadrant Team
Our industry, like so many others, is no stranger to myths. Systematic global macro has outperformed many investment styles over the past decade, and in recent history. Amidst the COVID-19 pandemic, mass quarantines, and an oil price war, most traditional risk assets had quite the ride in 2020, with particular turbulence in Q1. Though trading is far more orderly now than it was a year ago, we believe lessons from the recent past can help investors weather future risk events.
INSIGHTS
by First Quadrant Team
Today’s investors face a difficult challenge: stocks are expensive, but interest rates are low, and may remain low for some time. Many common alternatives appear compelling, but come with their own drawbacks, such as cost, illiquidity, and/or undesired correlation. One way to potentially enhance expected return is through a traditional technique, implemented with modern a perspective: Portable Alpha. Once a popular approach, Portable Alpha fell from grace in the aftermath of the 2008/2009 financial crash, when many purported alpha strategies collapsed alongside the beta they claimed to diversify. We believe these results, however, were attributable to execution, rather than the underlying philosophy. We think that a carefully designed Portable Alpha strategy can remedy the problems of the past and provide an innovative solution for the present.
INSIGHTS
by Ed Peters
Market pundits have been talking bubbles lately. The broad market appears to be overvalued by many measures. The recent volatility involving GameStop and silver have increased talk of bubbles. But exactly what is a “bubble?” Is a bubble something we know when we see but can’t describe? Maybe, but back during the tech bubble of the late 1990s/early 2000s, I did a study of historical manias and bubbles. One major take-away is that a “bubble” is a cultural phenomenon, and overvaluation is a necessary condition, but not a defining one.