Which Funds focus on timing the broad market rather than L/S individual equities?
Are there any funds out there that are essentially levering up the S&P/Nasdaq during identified risk-on/bullish periods and switching to defensive assets during identified risk-off periods? Essentially the opposite of a market neutral strategy. I understand that this is essentially just timing levered beta via some combination of trend following, breadth, vol structure, etc. (not alpha necessarily in the traditional sense), but it's a strategy I have real passion for.
Would the closest thing to this just be considered the usual discretionary macro funds or perhaps is this more of a thing only at RIAs / multi-asset managers given they are focusing on ETFs?
Essentially asking in the context of career advice and funds to reach out to based on my interest as I seem to only be receiving attention at L/S equity funds given my IB background.
Much appreciate any help!
Based on the most helpful WSO content, the strategy you're describing aligns closely with what is typically seen in global macro funds. These funds often employ strategies that involve timing the market and adjusting allocations based on macroeconomic indicators and market conditions. They are not limited to equities but may also involve bonds, currencies, and commodities, allowing them to pivot between risk-on and risk-off assets as market conditions change.
Discretionary global macro funds, in particular, might be what you're looking for. These funds allow fund managers to use their judgment to make investment decisions based on their assessment of economic and political events. This approach can include leveraging up indices like the S&P or Nasdaq during bullish phases and switching to more defensive assets during downturns.
Regarding your career path, given your background in investment banking and interest in market timing and macro-level strategies, transitioning to a role in a global macro fund could be a suitable fit. It would leverage your understanding of broad market movements and macroeconomic trends, which are crucial in such roles.
Additionally, multi-asset managers that focus on ETFs could also align with your interests, especially if they employ dynamic asset allocation strategies to switch between growth and defensive assets based on market conditions.
To further explore opportunities in these areas, consider reaching out to professionals in the field through networking, expressing your interest and background, and discussing how your skills in investment banking could translate well into a macro-focused investing role. Networking can be crucial, and leveraging platforms like LinkedIn or even forums like Wall Street Oasis to connect with industry insiders could provide more personalized advice and potentially open up job opportunities.
Sources: Q&A: First year macro hedge fund analyst, What would you do with $300k, A Contrarian View - Raging Bull, A Contrarian View - Raging Bull, Macro HF Interviews: Paul Tudor Jones, Louis Bacon and Bruce Kovner
Bump
Macro funds have some element of this.
Macro and CTAs
Thank you. I'm assuming from an IB background the best way to break in would just be networking aggressively? Don't really see any headhunters out there for discretionary macro funds or CTAs
Plenty of L/S funds are macro timers
- Higher net beta if you think markets will go up
- Lower your beta if you think markets will go down
Don't even need to pick the best stocks, again there's more nuance involved but get your indiv betas right and you're good for the most part
Most outperformance is most likely attributed to market timing
Thank you. Assuming places like pod shops would be the exception where emphasis is more on remaining market neutral and SMs are more dedicated to market timing?
I don't want to give you the wrong idea, SMs will not say that that's their process, although that's what the strategy is
You'll be more involved with pitching and researching stocks, so if that's not your thing then it's probably not for you
At a pod, you definitely can't rid beta
Why is timing the market, knowing economic cycle, thematic trends, etc., not talked about as much.
Expedita consequatur quas corrupti quisquam labore repellendus. Et expedita deserunt consequatur expedita ea enim necessitatibus. Delectus eius magnam quis ut amet qui. Quia omnis cum nobis. Consequuntur ad corrupti asperiores architecto maxime consequatur quo et.
Laborum suscipit repellendus qui omnis et praesentium. Odit ut ducimus voluptas molestiae non neque temporibus. Quis nihil sit nihil odit accusamus et nobis qui. Et illum praesentium commodi magni itaque.
Maiores repellat est possimus asperiores. At eveniet possimus provident fuga impedit hic. Neque odio repellendus qui labore aut inventore fuga.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...