The US Federal Reserve’s pivot to a liquidity-induced market environment over the past few years has not been conducive for many strategies and managers. The period of subdued volatility followed by COVID-19 caught many systematic and discretionary managers off guard. What strategies outperformed and where is extra due diligence required?

Sara Rejal, global head of liquid diversifying strategies, Willis Towers Watson
Michael Sommers, principal consultant, Frontier Advisors
Moderator: Laurence Parker-Brown, institutional content producer, Conexus Financial

Key Takeaways

  • Investors need to build an absolute returns strategy that suits their thinking about portfolio construction; this feeds into their willingness to accept stable or asymmetric returns streams and the conviction that they are willing to delegate to the manager.
  • The recent COVID market sell down in March has resulted in many investors re-evaluating their investment time horizon and whether tail hedging is appropriate.
  • To build a successful partnership with an asset manager, investors need to consider the culture fit – particularly when due diligence is restricted due to travel restrictions.

Poll results

ESG is important to my fund and I would like to see it feature prominently within liquid macro strategies…

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