Trends Watch: Systematic Global Macro Investing

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Neil Ramsey, CEO & CIO, Ramsey Quantitative Systems, Inc.

What is your outlook for investing in systematic global macro?

Looking forward, we see tremendous growth for systematic global macro. The key to the success of managers in this space is to not get seduced by more economic data that is available in higher frequency sources. All eyes are fixated on the continued rise in global equities, which gives the impression that all forms of timing versus buy-and-hold are sub-optimal investment options. Competing directly with buy-and-hold has been a losing proposition and systematic global macro managers should consider how to position their capabilities to add the most value to a client’s account based on their core exposure.

Where do you see the greatest opportunities and why?

The greatest opportunity is to find ways to add the greatest “fit” with your clients. Institutional investors understand that equities will not maintain their current return profile. They are also keenly aware that their bond portfolios will likely add little value to their overall portfolio. At current yields and prospective inflation, the positive carry of bonds has disappeared and likely will turn negative. Their bond “hedges” are likely a "cost" in real returns and they have lost both the stable negative correlations and the left tail protection that they used to rely upon.  Providing alternatives that do what bonds have historically provided is a great opportunity.

What are the greatest challenges you face and why?

We are a small, relatively unknown firm and gaining access to institutional investors and getting to tell our story is a challenge. This has been especially true during COVID-19 as we really need face-to-face time with a client to show our firm’s capabilities.

What keeps you up at night?

I’m a big fan of writing down what is bothering me and assessing to what degree we can address that in the way our models interact with the market. We live in a very leveraged time that is highly dependent on permanently low interest rates and a never-ending supply of government supplied liquidity. Both of those could change overnight if the world loses confidence in the U.S. Dollar. While this will likely manifest itself like the “frog in boiling water” phenomena, if it doesn’t, the markets could see chaos like never before seen. If it presents itself more incrementally, it will provide a great trading environment for systematic global macro traders.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.