[00:01:20]Corey Hoffstein: Hey, good afternoon everyone joining from the East Coast. Good morning, late morning everyone joining from the West Coast. This is a special episode of the Get Stacked podcast recording live August 6, 2024 at 2 p.m. Eastern or a little after 2 p.m.

Joining me is Rodrigo Gordillo, president at ReSolve Asset Management and portfolio manager on the Return Stacked ETF suite. My name is Corey Hoffstein, chief investment officer at Newfound Research, also portfolio manager on the Return Stacked ETF suite, and Mike Philbrick CEO of ReSolve Asset Management and Portfolio Manager on the Return Stacked ETF suite, and we are incredibly excited today to do this live Q&A. This is the first time we’ve done something like this, but we thought the market environment as we’ve seen it over the last week or two, and in particular yesterday, really warranted an open discussion.

And so we have a whole set of questions that we’ve received inbound prior to this call that we’re going to start working through. Please, whether you’re on Twitter or LinkedIn or YouTube or whoever you’re viewing this, please feel free to submit questions. We will see those, and we will try to address them as they come up, or put them in towards the end of the conversation. Again, whether you’re listening live or to a recording of this, we really appreciate your time. And if you have any follow-up questions, please go to Returnstacked.com/contact. That’s where you can set up either time to chat with one of us, send us a message, or there’s a live chat there. If no one is there, it will also send us a message and we can get back to you.

[00:04:15]Rodrigo Gordillo: All…

[00:04:15]Corey Hoffstein: And with that, gentlemen, are you ready to kick it off?

[00:04:17]Rodrigo Gordillo: I believe we are. I’m just checking on how many…

[00:04:21]Corey Hoffstein: Making sure all the pipes are connected for a livestream.

[00:04:24]Rodrigo Gordillo: All right. Beautiful, Corey, let’s …

The Macro Thesis on the Streets

[00:04:28]Corey Hoffstein: So let’s kick it off, gentlemen. Look, I don’t think any of us claim to be macro strategists, and I will at least speak for myself to say I do my fair share of dragging macro strategists. And I’m not one who usually likes to ascribe any sort of narrative post hoc to a market event, but you know, what are we hearing? What are we hearing in the streets? It does seem like there has potentially been an inflection point, or at least a really significant market event over the last two days. You had the Nikkei down 12 and a half % Monday, up 10 % today, big Trend reversal in the yen. What are you guys hearing? What seems to be the macro thesis that’s playing out in markets nowadays?

[00:05:13]Rodrigo Gordillo: Yeah.

[00:05:14]Mike Philbrick: I think it’s a combination of both a Carry trade on the yen being a very cheap place to borrow, and the piling on of that trade as it got cheaper. And the denomination of which you were borrowing yen also got less expensive to a point up, until probably five to 10 days ago, that started to unwind with a very large bounce in the yen currency, combined with actions by the BOJ in order to increase rates. So you had an increased cost of holding all of those leveraged trades, that occurred simultaneously, and they kind of feed on themselves until the levered trades come off, to the point where unlevered investors are willing to step in and start to purchase the assets that are on sale.

And so this is not a unique phenomenon. We’ve seen fits and starts of this. The Thai baht comes to mind, the flash crash comes to mind, the taper tantrum comes to mind, all as these very acute sources of, in the markets where the last dollar went in for now, it got a little overheated. The question is, is this going to turn into something long, prolonged? Is this the beginning of the end, or is this just a step back along the way? And remember, you know, if we go back. Let’s step back for a second, understand from 1950 to 2015, 65 year period, you had 61, 5% corrections in the S&P. You had 20, 15% corrections or 15% corrections in the S&P and nine, 20% corrections in the S&P.

And as you say, Corey, ascribing a narrative. is interesting. I think you can see a chain of events that occurred where there was a lot of push to, hey, we can really lever up this yen trade. There’s two sides of that yen trade, the cost of the actual interest rate and the underlying yen price in U.S. dollars, that came together that forced a bit of a de-levering for a period of time.

[00:07:28]Rodrigo Gordillo: Yeah, it was…

[00:07:29]Mike Philbrick: Had all kinds of cascading events. Go ahead.

[00:07:31]Rodrigo Gordillo: What was wild is like the magnitude, right? It was that 12.4% plummet in the Nikkei, the largest single day drop in history, you know, led a series of events that scared the markets, right? And we’re looking at the yen that surged to a 7 month high against the U.S. dollar, also led to this kind of domino effect. So it’s to be expected. And that’s kind of the exogenous shocks, kind of the endogenous stuff as you’re seeing. Weakness in the U.S. economy. You’re seeing the bubble, the AI bubble bursting a little bit in terms of the amount of revenues that are coming in for the tech companies, and Chinese weakness along with the Iran situation and Israel.

So, all these kind of generally tend to cluster when we see this type of sell-off. And then, of course, the questioning is how are you positioned to protect and benefit from that, if you need to?

[00:08:25]Corey Hoffstein: Yeah, I do find it interesting that I would have expected with a market event as substantial as we saw over the last few days, some sort of bodies would have floated to the surface. And I haven’t heard any reports yet of a large bank taking losses, or a big hedge fund, specific hedge fund unwind. There’s obviously a lot of rumors that there must have been a big trade unwind, but no named parties yet.

So it’ll be interesting to see if anyone ends up having borne the brunt of these losses, and will able to be able to peg in hindsight, Oh, it was that party or those set of parties. And indeed it really was not a reaction to true fundamental changes, but there was an over-levered trade that was forced de-levered. You got the tap on the shoulder with the margin call, and sometimes that’s why markets react.

Let’s talk about how this all spills over into Return Stacked products. And it’s interesting, one of the comments we received on our last podcast in the YouTube comments, was that someone said it seemed like some of the Return Stacked products were exhibiting unusually heightened volatility, moving a lot more than they would have expected. And so maybe let’s just start with a simple question. What are our expectations for volatility when you take something like the S&P and you stack a systematic macro strategy on top of it?

[00:09:48]Rodrigo Gordillo: Yeah, that’s a good question. And let’s kind of just do some simple math here. Let’s do the simple math and let’s do the actual math. But if we were to look at some of the popular stocks, you got your stocks, your S&P 500 stocks, you got your Trend, you got your Carry, you even got your bonds. If we just kind of focus on stocks, if you look at the long-term standard deviation of stocks, it’s around 20% annual.

If you look at the long-term standard deviation of a Trend Index, like the SocGen Trend Index, you’re looking at around 13% standard annualized volatility, right? So those are two separate volatility measures. And a lot of people think, okay, well, that’s 20% plus 13%. That’s a 33% standard deviation.

But when you take into account the really strong diversification benefits that Trend has, that Carry has, and so on, what you end up finding is that the stacked long-term standard deviation, for example, of S&P plus Trend is 22.5, is what we see from those two, that combination. So you’re only slightly higher than just the standalone S&P 500.

And the same thing applies when we look at Carry. It’s around the same thing, around 22% when you put that stack together. So it’s, the long-term picture is one of allowing us to stack those returns, but not necessarily stacking or doubling the amount of risk, right? There’s certainly a risk increase, but not a massive risk increase, in the long term.

But let’s talk about the short term, right, which is I think why we’re here. So let’s talk about the kind of the popular stacks that are non-correlated to equities, long-term. We have to remember that both of these strategies are directional strategies, right? They will load positively on the beta that it’s stacking on top very often, right? So if we happen to be loading positively on that beta and there’s a massive risk-off event from an exogenous event like the situation with the Nikkei, then you are going to see short-term increased risk, than just owning the beta. But it’s also not that simple because if you remember, we did, I think it was the second podcast for the Get Stacked podcast.

We were talking about how the equity we were, Trend, for example, was very loaded on Trend on S&P 500 coming into this. I think March 22nd, it was a month-long drawdown for the S&P 500. And the worry was your stack so high on, if you just look at that one equity position, that you’re going to get hurt, but there was an offsetting position that was large enough to more than make up for the loss inside the Trend strategy, that made it so that Trend strategies were actually providing a good offset to that month-long drawdown. The same thing applied to Carry strategies. We just, it just happened to be in that position. So this July 16 sell off, it wasn’t the case. We were, Trend was much more heavily weighted towards risk-on.

And so you are increasing the amount of risk and the risk positions were much smaller, now that’s Trend, you know, so the bottom line is at any given point, any one of these stacks may be in your favor. It may not be in your favor. Trend seems to be at it, not in our favor currently. Much like it was if you look back in, during the COVID period in the first week, but Carry came into this event short equities, and Carry has been a good offset during this event in a way the Trend has not, right?

So this just speaks to the value of diversity and diversifying your stacks, a bond that, the100 % equity, 100 % bond stack. That was good, right, because you got your bonds kind of floating a little bit of return. So that’s kind of the broader picture when it comes to the volatility aspect long-term and about the volatility aspect short-term being a bit more aggressive at times.

[00:13:46]Mike Philbrick: I …

[00:13:46]Corey Hoffstein: Mike, anything you want to add there?

[00:13:47]Mike Philbrick: Yeah. I think it’s important to recognize that Trend at its core, is being prepared, and not really predicting, right? So you know what you’re going to do. Trend says that something in motion, up or down is going to continue to be in that motion, until it proves otherwise. So as a Trend manager or managing Trend strategies, you are going to be giving back a little bit of those gains along the way, because you have to make sure the Trend has changed.

Your job isn’t to guess that the Trend has changed. Your job is to harness the Trends that exist with solid risk management and some diversity amongst the assets within the portfolio, and then let the markets tell you when to adjust. When volatility expands, you’re going to decrease positions. When Trends change, you’re going to reduce positions and sometimes flip them.

We have some of that going on. And again, you have some of that going on in equities currently. The nice thing in a Trend portfolio, and Carry does things a little differently, but I’m just going to focus on Trend. Trend is your friend until it bends or till it ends, however you want to talk to that. But until that happens, the Trend is in place.

So it’s not our job to try and guess on July 16th that this all-time new high, unlike all the other all-time new highs that have been, occurred in the last several months, is the one that is going to turn the tables and have a 10% correction, which is a pretty garden variety correction.

Now, because you’re sitting in those assets waiting for the Trend to change, sometimes your exposures are a little bit larger because they’re working, but this is the idea of not trying to predict, but rather being prepared to react both to the volatility and the positions that you have on, which we have seen some turn in the portfolios already.

And the nice thing in pairing this with beta is if it’s a snapback, well, you’re going to get that snapback and whatever beta is underlying that nice Trend overlay. But it’s really important to recognize, Trend is a value statement that says whatever’s currently ongoing will continue, in our best estimate.

[00:15:59]Corey Hoffstein: Rod, you’ve been using this phrase lately, leverage for defense, and you did an internal study that you shared with the team yesterday. And I thought it was a really unique in that, what the study found was, if you took something like the S&P 500 and you overlaid it with, say, the SocGen Trend Index, the big drawdowns in the underlying equity index, that combo actually had smaller drawdowns during that period.

So call it 2000, 2003 or 2007, 2008. It helped in those big drawdowns. But that stack had, on average, larger annual drawdowns than just the buy and hold underlying. And I feel like there’s somewhat of maybe a contradiction here, or misalignment of expectations when people think about stacking uncorrelated things or things with time-varying correlation.

I was hoping maybe you could talk to that a little bit, this idea of leverage for defense, but the fact that actually, on average, we would expect the drawdown in a stacked portfolio to be higher on an annual basis.

[00:17:08]Rodrigo Gordillo: Yeah, so for this, we have to talk about time horizons for investors, right? These stacks are not meant to be first responders, like low volatility or put options. They’re not there to immediately offset those losses, right? Because those first responder type of accounts come with a negative annualized Carry for a long time until they offset, right?

So we’re looking at least our first iterations of thinking about stacking should be about stacking returns, most years. And so when you’re stacking these types of non-correlated longer-term, second or third responder type of stats, you’ll find that because it’s directional, as I mentioned earlier, during the year, you will be caught offside momentarily, if we’re on the same risk-on trade, if there’s a risk-off loss. Now, the benefit of systematic, right, so, this is why we see more consistent year over year, slightly bigger drawdowns, than not having it as a stack. But when you allow these more prolonged periods to happen, we’re seeing it already, right? As soon as we started seeing these drawdowns, the systems are designed to reduce volatility very quickly. And so you see first the risk reduction, and then you start seeing transition towards the things that are working, and away from the things that are not, right. And so over a more prolonged bear market, like 2000, 2003, or prolonged bear market, like ’08, or like we saw in 2022, where you give a few months, a few weeks for it to work, you then start seeing the ultimate max-drawdown benefit. I’m having these stacks on top, right? So, we’re seeing those transitions now. I’m sure we’ll touch upon them, but that’s roughly speaking why the idea of defense is really what people care about, which is what’s my maximum pain point? It’s not the intra-year, small, nobody really, half of the people don’t really pay attention to type of product.

[00:19:11]Corey Hoffstein: I think the only thing I would add to that point, right, is if you just think about the average volatility, a stacked strategy, again, it’s not the volatility, the combination, but it is going to have higher volatility than the buy and hold. And so just by the fact that it has higher volatility, we would expect higher average drawdowns. But again, hopefully that diversification, if you believe there’s positive drift in that thing that you’re stacking on top, positive expected returns, that diversification can be extremely powerful for those prolonged drawdowns.

[00:19:41]Mike Philbrick: And. it’s important to remember that non-correlated or lowly-correlated strategies is not negatively-correlated strategies, right? A nuanced point, but two strategies that have zero correlation will still correlate, call it one in 20, one in 10, somewhere in between those, they will just by happenstance happen to correlate at times.

[00:20:02]Rodrigo Gordillo: Yeah, and…

[00:20:03]Mike Philbrick: Not a structural correlation necessarily. It’s just a sort of a chance correlation. That’s why it’s a zero correlation or lowly correlated.

[00:20:11]Rodrigo Gordillo: Yeah, and Corey, a question to you. I mean, we’ve emphasized stacking systematic macro strategies as a first attempt, and we have a variety of kind of risk limiters embedded in the portfolio, like VaR limits, position sizing, vol scaling. Maybe I think as a first, that being the first responder, could you expand a little bit on that and how that played out in this environment?

[00:20:34]Corey Hoffstein: And this is, yeah, this is something you see in a lot of systematic macro strategies, is that you have a variety of risk limiters embedded in the portfolio. So we really have sort of three categories. The first are direct market level and sort of what we call sector level position limits. So that might mean, for example, we can only hold so much in the yen or the S&P or in the 10 year U.S. Treasury futures contract. There are specific long and short maximum promotional exposures that we can have. And then it also limits when you roll that up to the sector level.

So cumulative equity exposure, for example, cannot in our Trend program get longer than 100 % notional, or more short than negative 100%. And so we actually saw that come into play in July. You know, it’s, you can clearly see the sell-off in the last couple of weeks. But if we just rewind the clock to mid-July, there were very strong global equity Trends and the Trend program wanted to get longer and longer. And we had that hard cap at a hundred %, which again, helped mitigate some of the losses as the market rolled over. And those are to a certain extent, just what we consider to be prudent caps, right? Again, we want to make sure that we’re not allowing the system to run wild into weird market corner cases.

The second level of risk mitigation is this volatility target, right, and this is more common in quant-based systematic macro strategies. Traditional Trend followers don’t actually do this sort of your old school, 1970s-style breakout Trend followers, but this is something more modern quant-based Trend followers do, which is they’re applying volatility targets, both at the market level position, trying to make sure that whatever exposure they have to a given market is always at the same vol target, and then at the portfolio level, right? And so, that’s really important because as portfolio vol expands, these sort of strategies will sell off positions, both long and short, right? They’ll buy back their shorts and sell down their longs to try to maintain a constant risk exposure. And then finally, we have the VaR limits, and these are regulatory, but they’re equally important.

And I don’t want to go into the SEC 18F4 rules specifics. We’ve talked about that in the past. But the important point is what, what these VaR rules do is they try to make you, or they do make you estimate worst case potential losses over the next 20 days. And if your worst case potential losses are above a certain threshold, you are required by SEC regulations to begin trimming your positions to get back within what is considered acceptable limits.

And those three different ways of managing risk all sort of work in concert to make sure that we’re not violating our risk mandate in any given direction.

[00:23:29]Rodrigo Gordillo: Yeah, that’s a great color, Corey. And, just to kind of add onto that on an internal call, Mike, you had a great point that the volatility scaling in these mandates means that investors, possibly into these products with less tracking error to the underlying beta, than usual periods of much more lower volatility, when you have kind of larger positions in the stack that may coincide with the beta stack. Can you explain a little bit of that and how, why that makes sense?

[00:24:01]Mike Philbrick: Sure. So the idea of Trend following is one of also building positions as the asset prices evolve. So you may start with a very small position in something like a yen short. As it becomes more profitable, and as the Trend asserts itself, you’ll see that position expand. And so you’ll get to large positions across the swath of asset classes over time.

We’ll be using a little bit more leverage to achieve that because you’re in a low volatile Trending environment. When you get a dislocation like this and volatility blows out and you have sort of this assets correlating to one, or negative one in some cases, what happens is you have a contraction in the size of the portfolio because some of those Trends were now incorrect or they’re reversing, or they’ve expanded in volatility, so they shrink down.

So when you’re entering Trend following strategies in a nice correction, what you have is smaller positions where they’re going to grow and adapt. You have a, maybe this is a regime shift, or maybe this is a correction. So maybe new Trends establish themselves from here. Maybe some old Trends reestablish themselves from here.

But if you’re entering at a point where you’ve had a good correction in a Trend strategy, generally, you’re entering at a very small exposure level, and then you’re participating as it grows so that inevitably when there’s a turn and you’ve got to give back some of those profits, you’re sitting on a nice profit line rather than coming in at very bloated, expansive positioning.

And then you’ve, it’s in the long-term, it doesn’t really matter. In the shorter-term, it just presents an opportunity. If you were thinking about allocating during drawdowns it’s a great way to do it, because you’re getting those initial position sizes put on as the volatility allows for it, and as the Trends develop, and so, counterintuitively, you know, buy and draw down,  

[00:25:58]Rodrigo Gordillo: Not a terrible time to ease in. I guess it’s the, and by the way, this applies to any systematic strategy, including futures, you’re able to Carry, because it’s vol size in the positions that causes everything to shrink. The gross exposure is low on most macro strategies.

[00:26:14]Corey Hoffstein: So let’s dive into those specific mandates. And I kind of wish we had done this at the beginning because we’ve been talking about Trend a bit, and I don’t want to make the presumption that everyone listening in either live, or at a later date, knows precisely what Trend following is. So can we begin just laying the foundation here with, can someone explain the basics of what Multi-asset Trend following actually is and how we think about applying it?

[00:26:38]Rodrigo Gordillo: Sure, look, Multi-asset Trend, the basics are, you want to have diversity. So you want to get exposure to asset classes that are, that move in different ways for different reasons. So you’ve got your equities, you’ve got your bonds, you’ve got your commodities, you’ve got your currencies, right? It’s a basic starting point for Trend following. And then Trend following is simply as simple as something that has recently gone up, is likely to continue to go up for one period. And the way one measures Trend, there’s no golden rule. I know there’s the golden cross that a lot of people like to use on the equity markets, when the, I think a 50 day cross to the 200 day, or maybe the golden cross is going to cross it below the 200 day. That’s a measure that may get it right over time, but not all the time. And the good news is that these, there’s different ways to measure Trend. It could be the 60 day, the 80 day, the 150 day moving average, could be breakout systems. The reality is that you want to use a wide variety of systems to allow your Trend strategy to be broadly correct about the Trend signal rather than specifically wrong about any single one.

So when we talk about managed futures Trend following, what you’ll generally get is a wide variety of securities that are being executed to go long or short, based on an aggregation of Trend signals for every one of those Trend strategies. And so the vast majority of Trend following managers, including our mandate, because we’re doing Trend replication here at ReSolve and Return Stacking, is you’re looking at mid-to-long-term Trends. When you add it, when you aggregate it all up, you’re looking at that type of look back, which means that again, not first responders, but getting the idea of the Trend is your friend at a mid-to-long-term positioning. I think that’s a good overview, but if I missed anything, Corey, Mike, let me know.

[00:28:32]Mike Philbrick: Well, I just think it’s also one of the sort of longer- dated, very tried and true proven ways to think about this. You can go back to Charles Dow. You can go to the Jesse Livermore, Richard Duncane, the Turtle Traders and so on, so it’s, this is not a new way to approach things, but it’s just observing what’s actually happening in markets and reacting to it, rather than trying to predict.

[00:28:59]Corey Hoffstein: So let’s talk about what’s actually happened over maybe the last month, maybe the last couple of days. Can you guys set some context entering July? What did broad positions look like in the Trend portfolio? What was sort of the macro landscape as we were seeing it? What was really driving those returns? And then as July sort of equity markets rolled over, the yen started to move, how did positions update and, where do we sit today?

[00:29:28]Rodrigo Gordillo: Corey, well, are we going to share this screen? Are we good to share that kind of, the transition? Yeah, well, I’ll pull that up. Why don’t you start talking about it, figure…

[00:29:37]Corey Hoffstein: Oh, I’m going to answer my own question. I love when I love it. It was a selfless.

[00:29:40]Rodrigo Gordillo: Unless you want to do the sharing, but I’ll…

[00:29:41]Corey Hoffstein: I passed the ball to myself. Look, entering July, there were really two very strong Trends. The first is that global equities, as I mentioned before, had had very strong positive Trends. And so the Trend portfolio was strong in the NASDAQ and the S&P and the Nikkei and the FTSE 100. There were just strong, broad global equity Trends, and so there was a significant equity position. There was also a very persistent sell off in the yen versus the U.S, dollar. And so like many other CTAs, we were very short the yen, not for Carry reasons, but because the way that that Carry trade can manifest is, is people selling the yen as they get the funding. They ultimately end up with selling out of the yen to buy whatever they want, and that ends up with downward pressure on the yen.

And so the two big positions we really had were long equity, short the yen. What we saw in July, and this is the graph that Rodrigo has pulled up now, is that by mid-July, we had hit that position cap that I talked about earlier. We could not in aggregate get the more than a hundred % equity.

That cap was hard fixed. And then as equity markets started to roll over, we started to sell off that position, from 100% to about 50%. I believe as of Friday’s close after trading yesterday, I believe we are substantially below that. So we cut about 50% of the equity position over the last month.

It’s not something that jumped in a single day. It’s something that continuously, part of this is the Trends rolling over part of this is volatility contraction, and I think both of those are playing into our, excuse me, volatility expansion, leading to positioning contraction. The other major change I mentioned that we were very short the yen. I believe we were, entering July, had a negative 70% notional position short the yen, and that came down again, quite dramatically through the month to the point now, I think we are, have a short position of less than negative 5%. And a lot of this was simply due to the fact that the yen rallied back hard, and we don’t use a single binary trigger.

This is a continuous Trend system. So as the yen moved against us, we continue to trim our position as yen vol expanded. We continue to trim our position to keep the risk size in line. And what I want to emphasize here is, even though equities and yen are clearly the biggest drivers of loss in the last two weeks, if we look at their contribution to portfolio performance, year to date, their contribution is still positive, right? So Mike mentioned the Trend is your friend until it bends or it ends. Yeah. These turning points can be violent, but if you capture the full breadth of the Trend, we were still able, as we estimate via our contribution to profit from both the Trends in equities and yen year to date, despite the fact the last couple of days have been quite violent.

Now, there are other Trends that didn’t manifest, like oil has been a tough one year to date. And bonds have been a little tough year to date. The Euro has been a little tough year to date. That has led aggregate Trend performance to be basically flat to negative at this point, but at the end of the day, those two particular Trends, which were sort of the largest drivers entering July, and the largest drivers of loss in the last two weeks, were actually still positive contributors to P&L year to date.

[00:33:17]Rodrigo Gordillo: Yeah. And well, let’s talk, let’s get into Carry just quickly. I’m going to pull up the same chart and maybe you can speak to…

[00:33:24]Corey Hoffstein: Let’s hold Carry. Let’s stay on Trend because we’ve got some more. So, one of the questions that’s come up and it’s coming up in the chats and it’s come up a lot is, if we did have a lot of losses due to the equity positions, and we had a whole lot of equity entering July, and we’re stacking this thing on top of equity, potentially, if we’re really looking for a diversifying stack, wouldn’t we be better off not holding equities in the Trend mandate, right? Why not take more of a commodity focus or why not remove equities entirely?

[00:33:57]Rodrigo Gordillo: Yeah. And I think this again goes to the point of return stacking is to stack returns, right? It is, that’s the, that’s the first portion of the name, and that is, you want to do that while trying to minimize as much risk as you can. If you are simply looking to find a non-correlated thing that will be a first responder to your equities, there are other tools for that. For our purposes, we want to maximize the amount of years that you stack positively. And this goes back to the fundamental law of active management, which is that you want to have breadth, and depth in your strategies. The more securities that are non-correlated, that you give an opportunity to go long and short based on any factor, whether it’s Carry or Trend, you’re just going to, by the virtue of diversification, the expectations that your Sharpe ratio will be higher, a higher Sharpe ratio means that you are expecting a positive real rate of return over time, more often.

So it’s just a trade-off, right? Do you want a, do you want something that acts as a hedge, that provides a lower return stack? And you can do that yourself by using something like 100% bonds, 100% equities, to make space in your portfolio to add whatever first responder you want. In the stacks that we’re talking about with Trend and Carry, what we’re trying to do is give you a solid as possible, higher Sharpe, maximally diversified portfolio. And that includes equities, right, in order to win more years than we lose, and equities also benefit from being short equities when you need them to be short, right? So it’s not necessarily that owning equities is a bad thing. Sometimes, like now, when you get caught outside, it has been a bad thing, but not always.

[00:35:50]Corey Hoffstein: The only thing I’ll add to that is I’ll suggest the research of another firm named Quantica, who wrote a great Q2 piece about the role of equities in a diversified Trend mandate, and exploring if you remove equities, what does that do to the return expectations of the Trend mandate over time? And what does that do to its correlation and crisis alpha abilities?

And that’s a publicly available piece. If you Google for Quantica and you go to their publication section, it is the Q2, 2024 piece. And I highly, highly recommend people read that piece. I often think about writing one myself on this very topic. Every time I do, I just go, well, they’ve already written such a phenomenal piece on it.

I just ended up forwarding that thing along to just about everyone who asked me about it. So there are absolutely trade-offs and, and to summarize, their result that they find is yes, you can improve the diversification benefits of the Trend mandate if you remove those equities, but it is definitively at the long-term expected return of the Trend mandate itself. And so there are trade-offs for us in terms of trying to replicate the performance of the Trend space at large. All of our research suggests you have to have equity exposure because that’s what every other manager is doing.

[00:37:05]Mike Philbrick: Yeah, it creates other problems where you are Trend following in assets, all except equities. And that strategy becomes a quite different strategy and can have very long periods of drag on an equity portfolio if they’re not present, not to mention the different ways that all of these asset classes within the strategies respond to inflationary and growth dynamics.

So if you remove equities, you’re removing a portion of the portfolio that will respond very well. If you’re looking at developed equities in a disinflationary environment, like the one from, you know, 2010 to 2020, and so you have a very strong positive Trend that you’ve kind of removed from the portfolio, and not a lot of other commodities kept up with that.

So you have this hole in your portfolio where you’re sort of saying, I’m not going to take advantage of an environment where we have low and falling inflation with persistent growth. And so thinking through the quadrants that manifest from inflation and growth dynamics, you want to make sure that you are trading asset classes that belong to all four of those quadrants, so that if you’re in a period of stagflation, you’ve got something that works.

If you’re in a period of disinflationary growth, you’ve got something that works. Stagflation and inflationary growth are the other two, but you want to have assets that respond well in those environments, in order to make sure that you’ve got a fulsome strategy against whatever may arise in the markets.

[00:38:38]Corey Hoffstein: We talked around this, maybe Rod, you touched on it directly a couple of times, but I want to just really emphasize it. A lot of people believe that Trend following has a crisis alpha characteristic. This is a term, I think it was coined by Katie Kaminsky post-2008. I want to get your thoughts on one, should we think of Trend as providing crisis alpha, and if so, how are we defining that crisis alpha?

[00:39:09]Rodrigo Gordillo: Yeah, it’s, this is again, I think Jason Josephiac from, coined the risk mitigation program in Makita when he was there before he talked about the first, second and third responders. And I think if you, if I were to label something crisis alpha, I would say the first responder to the crisis alpha, and again, that’s long volatility.

That’s like long-term put strategies. Short-term Trend traders that can very low capacity, trade very quickly. And I think Trend following comes in the second part of crisis, right? How do we define a crisis in the second responders? It’s more prolonged week, prolonged months, sustainable Trends. That by nature, by the fundamental nature of Trend following, you will have things, you will have the transition towards the things that are working and away from the things that are not, and provide a level of balance that the vast majority of strategies don’t. There is something unique about Trend following that it does provide that more long-term view.

And when you look at prolonged bear markets, whether it’s in bonds or equities, when you look at 2000, 2003, it was there in spades. When you look at the SocGen Trend Index in ‘08, it was very, very powerful once you allowed it to transition. And I remember personally allocating to a HL diversify when I was an advisor for my clients during ‘08 and in July when I’m telling my clients, this is your crisis alpha. July, August was brutal for Trend following. It just, it lost at the same level as equities. It was hard to hold, but then when the Trends crystallized in late September, October, November, you know, all my clients were there to high five me, right? So, you know, from personal experience, it is a tough thing to hold on its own. That’s why I also prefer it as a stack, but I think it’s more of a prolonged multi-week, multi-month type of strategy for crisis.

[00:41:10]Corey Hoffstein: I mean, in my opinion, you hit the nail on the head, which is what’s the speed of the Trend following? Intraday Trend following is very different than long-term Trend following. And our expected response time is very different, right? That intraday Trend following might actually be a first responder. Very fast multi-day Trend following might be close to a first responder. Those look like very short-term puts. You know, you look at a very slow Trend follower that looks like the performance of a very long-term put. Anyone who’s bought a one year put, right, it doesn’t move a lot with price change because there’s still a year of performance that needs to play out. And so it’s just not sensitive to very short term changes.

You need really big moves and longer-term Trend following’s like that. And so again, what we find is that longer-term Trend following has the performance characteristics that we like sort of into, I would say intermediate-term Trend. Why I wouldn’t say super slow intermediate-term Trend following has the performance characteristics. We like that. It has the ability to adapt, in those real fundamental regime changes, but it’s very rarely going to provide meaningful protection in sudden market shocks, particularly in my opinion, if they’re endogenous market shocks, where you get a sudden unwind of leverage that happens over a two-or-three-day period.

[00:42:28]Rodrigo Gordillo: Yeah. All right.

[00:42:30]Corey Hoffstein: You want to talk about the futures yield strategy?

[00:42:32]Rodrigo Gordillo: Let’s do it. Let’s do it.

[00:42:33]Corey Hoffstein: All right. So let’s start with the basics again. I, in this one, I’m definitely not going to presume anyone knows what our futures yield or Multi-asset futures yield sort of Carry program does and looks like. So let’s start with the basics there. Can you explain what we’re looking at, how we’re thinking about building this portfolio?

[00:42:52]Rodrigo Gordillo: Yeah, let me just start with this Carry strategy. The futures yield strategy is not the yen Carry trade. And so, it is a much more diversified, and I’ll get into that, but Carry, the idea of Carry is what you get when the price of an asset does not change. So in equities, Carry is its dividend. You buy IBM and the price doesn’t move for a year, what you’re going to receive is that dividend, okay? And in managed futures yield strategies, instead of us selecting securities based on Trend, we can select based on something else called Carry. We can actually measure, the amount of yield you’re going to get on commodities, equities, currencies, and bonds are very well diversified at any time.

And you measure that yield based on the differential between, one way of doing it as a differential between today’s price and the future’s price. And sometimes it’s higher, sometimes it’s lower. I won’t get into the intricacies of that. There’s a bunch of videos that we’ve done, but that is how we measure Carry and depending on how strong that Carry is, we are going to then select what we go long and short, and by how much.

So one key thing here about Carry is that we’re not using Carry as clipping coupons and hoping for the best. We’re using Carry like, let’s say a dividend achievers index might select equities. They’re selecting equities based on dividend growth and dividends that exist for the purpose of wanting to own things that are going up more than the market.

So when we look at Carry and again, there’s multiple Carry signals. You guys can go look at the White Paper that ReSolve did on Carry and the webinar that we did there, if you want to get into the nitty gritty, but it’s a wide variety of signals and the goal of identifying those signals is that we see empirical evidence that when selecting strong Carry asset classes, it tends to follow that the price appreciation follows or the price depreciation if we’re going short. And so, they’re Trend managed futures and yield managed futures, Carry managed futures, trade roughly in the same asset classes, but have very low correlation to each other. Much like value investing and equities and growth investing or low volatility investing are lowly correlated to each other, but are using the same securities to select, right? Long-term Trend selection has a head rate of 50+%, 52%, 54%. Carry has 52%, 54%, but when they hit correctly, oftentimes they are not, they’re offsetting each other, and when one is wrong, the other one is right. And then there’s the Venn diagram when they’re both right. So it’s a very, very good strategy. And we, the next best strategies have from Trend, I think, to diversify your bonds and your equity.

[00:45:49]Corey Hoffstein: It’s a little bit of an in the weeds question here, but Chris Johnson asks, why would the Carry factor work on assets where there are no natural hedgers? For example, the Carry trade or Carry trade on equities are using Carry as a signal for equities. There’s not an explicit risk transfer there, is there? And I’m happy to just dive right into the answer to that one, because I was thinking about it with equities, right?

As Rodrigo mentioned, you’re looking at effectively, dividends. And the idea here is, again, we’re not trying to capture and isolate that dividend itself. We’re trying to use that dividend as a forecast of future total returns, with the idea being that when that dividend yield is higher, it tends to indicate that equities have more attractive expected total returns. And when the dividend yield is lower, particularly lower than average, it might imply that they have lower expected total returns. And that does align with not a bit of a risk transfer, right?

Why are the yields high? Well, it tends to mean it’s not that the dividends have necessarily moved. It tends to mean that markets are on sale. The perception of risk is much higher. And so people are demanding a much higher Carry to be willing to buy that asset because the expectation of risk is higher. On the other hand, when Carry is quite low, when the dividend yield is quite low, people are very confident about market returns. They’re not demanding as much Carry for the risk that they’re bearing.

And so we would argue that that’s actually not an environment that we want to participate because it tends to indicate maybe their, the risk appetite is wrong. And so for us, it is actually a risk transfer. It’s tied directly to a risk premium, which is very much related to the fundamentals, economic drivers of earnings risk, and that sort of stuff. So, if you go to both the White Paper that ReSolve wrote, as well as on our Returnstacked.com page, there’s a What to Stack section where we have a huge piece all about the history of these futures Yield and Carry type of strategies. And we talk in there about some of these concepts or what are the risk drivers that we think we’re capturing in each of these asset classes.

[00:47:59]Rodrigo Gordillo: Yeah. And I think a lot of people have been saying, I think one of the things that we need to really hone in and talk about, is the idea that this whole thing was actually sparked by a massive yen Carry trade, and that led to a de-levering. So, Mike, maybe this is a good question for you. How do we reconcile that theory of the, that Carry trade with the fact that when you look at the Carry strategies that we’ve been running, it’s generated, not massive positive returns, but positive returns, nonetheless.

[00:48:31]Mike Philbrick: Yeah. I mean, you’ve got a Multi-asset Carry trade, and you guys have summed that up pretty well. The signal and Trend is something’s going up or something’s going down, and it will continue to do that.

The interesting thing about Carry, you’re signaling some sort of yield that you’re going to capture as the thing that’s going to cause you to position in that asset. So that’s across a lot of different assets. It’s all about positioning. Also not going to get on the wrong side of the Carry trade. We were very profitable in the end as people were piling in desiring more leverage. And so we were on the other side of the trade, so that when the trade rebounds, we’re actually providing some liquidity to the market as well.

I think at its core and the nice feature of Carry is the fact that across all of this asset suite, you’re not looking at the Trend being the signal, but what is the yield that you’re achieving to the portfolio, which has the wonderful benefit of always having a tailwind when you’re operating your Carry or yield strategies, versus in a Trend situation, you can be buying stocks as they are rocketing upwards.

And in a stock context, let’s say the yield is a part of that. The yield is getting smaller and smaller and smaller, but the Trend is stronger. So you’re getting yet less yield and speculating more, whereas in a Carry context, you’re looking across all of the different assets. You’re saying, where are we seeing nice, juicy Carry, with respect to the assets history, with respect to other assets that we can be invested in?

And then you’re saying, hey, all things being equal, I’m going to get this juicy Carry. And then when it narrows, that’s when my profits come. And when it’s across a number of different assets, you’re not caught in a yen Carry trade, which we kind of summarized at the beginning, which is everyone jumping on the same trade, levering to reach for whether it’s risk or yield or whatever they’re reaching for.

And then eventually the last dollar goes in and unwinds. You’re talking about broad diversification across a number of asset classes. And then you’re just clipping coupons as you wait. So you’ve got this nice tailwind in a Carry portfolio. And it often is looking a little bit ahead because you’re not looking at price.

You’re looking at what’s my Carry. And so it is factoring in some things that are happening in the marketplace that market participants have all agreed on is the appropriate yield. And historically, when that yield gets juicy, you have potential to make returns.  And it doesn’t seem to act quite as much like crisis alpha, although it seems to be much more consistent in its value add, so that’s another interesting feature that complements the Trend strategies.

[00:51:13]Rodrigo Gordillo: And so, let’s get into the nitty gritty, Corey, maybe we can talk about how the Carry portfolio was positioned in July and how it evolved over the last six weeks, and I’ll share screens so we can put some visuals to the story.

[00:51:27]Corey Hoffstein: Yeah, I mean, I think the two important drivers here were that unlike Trend, we were short equities and pretty substantially short equities to the tune of negative 70 % was the aggregate positions, but across global equities, and this is predominantly because two reasons.

One, the Carry on equities right now seems to be objectively pretty unattractive. If you take the current dividend yield of most global equities and subtract their local risk-free rate, it doesn’t look great, right? Low short rates have risen quite a bit in most developed economies. And yet the yield being offered on equities is not that attractive. And so they’re offering not only historically low Carrys, but in many cases, negative Carrys.

And so that in and of itself is a sign. Hey, something to potentially be short here from a directional perspective. The other thing that’s important here is that this portfolio and its composition takes into account cross-asset correlations. And so what we actually saw, and we’ll talk about this in a second, is we were short the yen, right? So we actually were participating one could argue in the yen Carry trade, but the yen and equities ended up becoming slightly positively correlated assets. So that short in equities helped offset some of the risk in the Japanese yen. Now, we weren’t as short as the Trend program. It was a negative 40% notional short, but you can see again, as the yen vol picked up, this position continued to get trimmed all of July.

And it’s down to about a negative 10% position right now. Not because the Carry being offered substantially changed, right? This wasn’t all of a sudden, predicting that 25 bip BOJ hike, this is just really in response to changing correlation dynamics and changing volatility dynamics across the asset classes.

[00:53:23]Rodrigo Gordillo: Yeah. And I think, you know, one of the things is I mentioned earlier was that Carry was able to offset, in the last few days, roughly we talk about how at any given time, any given crisis, Trend may be positioned beautifully and Trend may be positioned incorrectly. Same thing for Carry. And sometimes the positioning is really strong and really strong offset. In this case, we still had long positions in oil at the same time that we had short positions in equity. And when it’s risk off, you’re just going to have, it’s not going to be as powerful, right? So I think Carry has done moderately well. It certainly hasn’t increased the risk to a beta stack, to a traditional equity or bond stack, and it has provided some balance, but not, it hasn’t offset the same amount that Trend has lost, and I think that’s important.

[00:54:16]Corey Hoffstein: Yeah. I think internally it ended up being a lot more offset with the negative equities offsetting the short and yen, but the, any positive performance realized in the Carry stack did not fully offset the performance of the Trend stack, but which leads to another question we get all the time, which is when people look at the underlying asset allocation, a lot of times, they’re seeing the equities, right?

And into July, you had a big positive equity exposure in Trend. You had a big negative equity exposure in the futures yield program. And a lot of people have asked us, well, are these just offsetting positions? If I buy these things together, am I just back to the S&P, and I’m paying you guys way too much money for something that’s just giving S&P exposure? You know, I was hoping you guys could maybe comment on the expected diversification of these strategies. When do you think they might offset? When do they not? Should they just offset over time? Or do we find that there are periods where actually, they can be highly correlated?

[00:55:13]Rodrigo Gordillo: Yeah, look, I think that these, first of all, we need to think about these strategies as independent bets, right? Again, if you look at the historical correlation of the Goldman Sachs Carry Index or the paper that we wrote on Carry, you’re looking at correlations to Trend that are, you know, between 3, 5, so very, very low. But again, it is still a positive correlation. And that means that at times they’re both going to be up in the same direction. And some of the things that, the way to think about this is that going back to that statistic, that if you have a, if you have a coin, a false coin that is giving you, allowing you to win 51%, 52 % of the coin flips for the average person, it’ll feel like you’re losing 50% of the time, but the law of large numbers makes it so that any one of these strategies, if you have this false coin, that you’re going to win ultimately over time. This is what the casinos do in Vegas. They have a 51% edge and they make a bunch of money, right? And so it’s two independent bets that have a slight edge that are independent, sometimes will coincide by happenstance, and most of the time we’re very different, but they both have a positive expectancy for different reasons. So it is more random than we think as to when Carry and Trend will coincide. As far as I can see, Corey, maybe you have some insights that I haven’t, that we haven’t discussed, but I kind of just, I really think that people should see it as independent bets, that over time will be different, but sometimes coincide and sometimes offset, sometimes both lose at the same time and so on.

[00:56:49]Corey Hoffstein: One of the examples I like to talk about, and it’s harder at the portfolio level, because again, you have all these moving pieces, but I think sometimes if you distill it down to a single asset, it can become a little clearer, is Treasuries, U.S. Treasuries. And I want to start with 2008 where you had an environment where you started with a slightly inverted yield curve, but you ended up with this positively sloping yield curve and interest rates were getting cut. And so you saw those yields coming down and down. Carry was getting worse and worse as the yield curve was getting flatter and flatter. And you ended up with very unattractive Carry in bonds, but because the yield curve was declining, very positive Trends.

And so Trend was very long Treasuries. Carry had a very negative perception of Treasuries over that period. Fast forward to 2022, you had an inverted yield curve environment and rates were going up, right? So by rates going up, you ended up with negative Trend in bonds, but because it was an inverted yield curve, you ended up with very unattractive Carry in bonds, and so both Trend and Carry were short bonds in 2022. And so again, these are not strategies that are inherently opposite to each other. They’re very regime dependent and both picking up on different macroeconomic signals. And that’s why we think it’s so important to diversify across both.

And again, I can only speak to what I do. You know, when I build my portfolio, I have half my position in our Trend program and half the position in the Carry program, because to me, they’re better together and diversified over the long run. And that’s the way we advocate. Many people use them in their client portfolios. So, you know, again, there are going to be times, these are time varying strategies. You know, as we saw with Trend, it was very long equities. Now it’s cut its equity position. Both of these were very short yen. Now they’ve cut their yen position. There are going to be times where the correlation between them and core betas of stocks and bonds ebbs and flows, but it’s really, the long-term correlations are near zero.

[00:58:58]Mike Philbrick: I think, fundamentally it comes down to looking through a different set of goggles, if you will, in order to decide what one should buy or how one should position a set of assets.

And these two things Trend and Carry, while they will correlate at times, are just very different lenses to look at the macro asset universe through, and often are going to provide very nice offsets. And then there’s the times when Carry’s high and Trend reasserts itself. And that’s the jungle juice right there. That’s the good stuff where you’ve got high Carry, which often means very low confidence in equity markets, and you have a Trend that’s asserting itself and saying, yes, you should be long.

And that is where, certainly that that’s where it, the golden goose rains golden eggs, because you’re in a Trend early on when it’s occurring, and you’ve got lots of Carry happening with that. So that’s a wonderful set of circumstances. I’ll balance that off with all the other situations that occur.

[01:00:08]Rodrigo Gordillo: All right. So look guys, we’re about an hour in. I’m going to answer one quick question, then I’m going to do some housekeeping if that’s okay. Are we good at an hour’s…?

[01:00:16]Corey Hoffstein: I mean, I’ve got two questions here from the chat I’d love to ask if you’re open to it? One of them is a real rubber meets the road question, which is where we spend a ton of time with financial advisors is okay, how much of this Return Stacking stuff should you actually do in a portfolio, right? So let’s start with saying, this is not a recommendation, right? You should talk to a financial advisor if you’re an individual listening to this, and make sure they really understand your risk appetite, as well as how much risk you can actually bear in your portfolio. What we tend to see is that, you know, putting on a small 1%, 2%, 3% stack great, but it doesn’t really move the needle in the long run. Anything north of a 20% – 30 % stack tends to get pretty uncomfortable for most people. That’s where I start to say you start to stop looking like a traditional asset allocation and start looking more like a hedge fund. And for some people that’s okay. I personally have a very large stack on my personal assets.

I don’t mind looking different than the market, but for a lot of people, that sort of tracking error can be very uncomfortable, and so I think it’s, you have to sort of make sure you’re in a place that it’s worth all the mental headache and understanding and education of what you’re doing to introduce, it’s not worth it for a 1% allocation, but I think realistically north of 20% tends to be an area where we say, you have to be prepared for a pretty sizable amount of tracking error.

That’s going to be, if you’re splitting between Trend and Carry getting to a 2% plus tracking error, and you’re looking at anywhere between 4% to 6% around the index in any given year, plus or minus, and that’s quite a bit.

[01:01:58]Rodrigo Gordillo: Yeah. I think that’s the key thing at some point, the larger the stack, the more diversity, the more balance you generally are going to have to your equity portfolio. But you really start looking like your own idiosyncratic portfolio. So tracking error tends to be very important and it’s just human nature. We’ve learned over the years that we can’t blame people for feeling that way, so I think, given how important it is, you should keep that threshold 20% – 30% number in mind, if you really don’t care and you truly mean it, because a lot of people say it, and then they immediately regret it. Then, you know, it’ll depend. Now you start wanting to define how much, what your maximum would be.

[01:02:44]Mike Philbrick: Look, can we, the efficient frontier would suggest sort of 50% – 60 % stack if my memory serves, right? So, you know, that’s something to think about. I’m not suggesting that that’s where you go, but you know, if you’re a mathematical nerd and looking at the efficient frontier and how you might stack on a balanced portfolio, you’re looking at a much larger stack than probably, as you two gentlemen point out, is behaviorally achievable and maintainable, but it should help serve as a bit of a calling card for investors to consider this in that range where they can get comfortable with it and be disciplined and own it for the long-term. As always, the behavioral challenge is, are you…

[01:03:27]Corey Hoffstein: Nothing like losing a…

[01:03:28]Rodrigo Gordillo: I think he might own it for a long…

[01:03:29]Mike Philbrick: Oh no…

[01:03:31]Rodrigo Gordillo: So I’ll just put a bow on it and just say that once you go into the, I don’t care that for the benchmark stuff, then you need to start caring about what your risk tolerance is. And, you know, a good heuristic here is if you measure the volatility of your stacks, hopefully it’s multiple stacks and multiple diversified strategies and the volatility is 10%. A good heuristic for me has always been what is, you know, 10% minus 10%, minus 10%, minus 10%. That’s roughly a three standard deviation negative event. You assume a 10% rate of return. So 10 minus 10 is zero, minus 10 is negative 10, minus 10 is negative 20. Add another 5% just for giggles and you’ll probably hit a pretty decent number of what the drawdown is going to be, that you should expect, and you have to be able to stick to that or else it’s not worth it, right? So if you need it lower, you get it lower. If you’re okay with doing it, we got clients that are like, give me seven, you draw it out. Like straight up legit clients for years that are okay with that and have hit it and have stuck with it, and that’s something you’re going to have to assess on your own.

[01:04:40]Corey Hoffstein: Last question from the chat that we’ll hit right now is someone asked, what has been the historical returns and correlation of the Trend index of stocks and bonds? Again, go to our website, Returnstacked.com. We can’t show you how the track record of our, how we managed Trend. There’s regulations against that, but that What to Stack section, we’ve written a very long piece on Trend, following the history of Trend, following academic studies, Trend finding.

And there’s a whole section at the end that looks at the performance of the SocGen Trend Index, it’s correlation to stocks and bonds over time. It’s conditional correlation during periods where stocks are up or stocks are down, when bonds are up, when bonds are down. It looks at its conditional returns during different economic regimes that Mike talked about, the inflation, deflation, economic growth and economic stagnation. So there’s a ton of information that’s on our website. A lot of graphics there that you can take a look at to get an idea of how this stuff should behave when you think about starting to stack it.

[01:05:35]Rodrigo Gordillo: Yeah. Yeah. So on that, given you’re talking about the website, just some housekeeping items. You know, we’ve done a few webinars that we are going to start pushing live in the next couple of weeks as on demand so you guys can, webinars on a wide variety of things, products and research, so if you’re interested in that, and we’re also going to have this recorded and sent out to the list. We also will be sending out a flash report that gets into product. So if you’re interested in receiving that, the first thing you should do is go to our website at Returnstacked.com and sign up, put your email in there if you haven’t already, and I’ll give it until, give it an hour before we send that out, and you’ll be included in that mailing list, and as we push out those webinars, you will also be notified. The website provides a ton of content. We also have the YouTube channel and our podcast, the Get Stacked Podcast, the Get Stacked Investment Podcast, because you’ve got to write that out to find it on YouTube and any podcast player that you enjoy. So did I miss anything in terms of housekeeping guys?

[01:06:42]Corey Hoffstein: No, just finally to say thank you everyone who tuned in live. If you’re listening at a later time, we appreciate your time and hope you got some valuable education and information out of this podcast. If there’s anything we didn’t touch on, as Rod said, make sure you reach out to us and we’re always very open to feedback.

If there’s a better format that you’d like us to review this material, please let us know. We’re here in service of everyone who has been an allocator. And we thank those of you who are allocators.

[01:07:10]Rodrigo Gordillo: Yes. Thanks everybody. Really appreciate your time and interest and we’ll catch you guys on the next live stream. ​