TOL - 28th May, 2024
Have you been burned by the stock market's wild ride? This investor may be able to help
Dr Christian Baylis, CIO and Founder at Fortlake Asset Management has seen a few cycles. Here is his advice on navigating this market.
If the last three years have taught investors anything, it's that trying to call interest rate moves is both a) extremely difficult and b) a fool's errand at the best of times. Even if you do call those interest rate moves correctly, you still have to end up on the right side of the trade - and 2022 proved that owning bonds as a recession hedge does not work if the recession is caused by rampant inflation and central bank mistakes.
So far in 2024, we've seen hikes priced into the Australian rates market after one tiny upside surprise on first-quarter inflation - only for it to be erased a week later.
Meanwhile, the US rates market has gone from forecasting six rate hikes to one in a matter of months - with each move being spurred on by the wrong kind of surprise on individual data prints.
So, how do you cut through the noise and make a profit through this volatile cycle? For one, create a process that reduces unforced errors and accepts you don't have all the answers.
Dr Christian Baylis, CIO and Founder at Fortlake Asset Management is joining us for a brand new edition of Views from the Top. Baylis has years of experience in academia and markets - working at the RBA and later at UBS where he managed over US$26 billion at one point as Head of Derivative Strategy and Credit Trading.
In this interview, you'll also hear from Baylis about the benefits of a quant-oriented fixed income strategy, why he thinks higher interest rates could actually be fuelling inflation, and what opportunities he sees in the coming months.
Timecodes
- 0:00 - Intro
- 0:38 - How does your prior experience inform your investing style today?
- 2:26 - Why do you invest in the fixed income markets with a quant approach?
- 3:54 - How do you cut through the noise to make profits in a volatile environment for fixed income investors?
- 4:58 - How do you reduce "unforced errors" as an investor?
- 6:55 - Negative rates were not even in textbooks 10 years ago. Are we facing another change in regime now?
- 9:20 - Why Fortlake is launching a fund made for "equity refugees"
- 10:47 - Two other opportunities available in today's market - accessing the corporate default system and inflation 'curvature' assets
- 13:25 - Christian's View from the Top
Extra Material:
Some of Gennadiy's work is available here and here.
The original link to the Apollo Global Management chart we highlighted in the video is available here.
Managed Fund
Fortlake Real-Income Fund
Global Fixed Income
View
Managed Fund
Fortlake Real-Higher Income Fund
Australian Fixed Income
View
Find out more
Fortlake Asset Management, as an experienced fixed-income manager, offers institutional expertise in a specialised setting, focusing on generating returns above inflation.Visit our website for more information.
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Hans is one of Livewire's senior editors. He is the creator and moderator of Livewire's economics series "Signal or Noise". Since joining Livewire in April 2022, his interview record includes such names as Fidelity International Global CIO Andrew McCaffery, JPMorgan Asset Management Global CEO George Gatch, and Lazard Chief Market Strategist Ron Temple just to name a few. He has a double degree in economics and journalism.
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Hans is one of Livewire's senior editors. He is the creator and moderator of Livewire's economics series "Signal or Noise". Since joining Livewire in April 2022, his interview record includes such names as Fidelity International Global CIO Andrew...
Expertise
Hans is one of Livewire's senior editors. He is the creator and moderator of Livewire's economics series "Signal or Noise". Since joining Livewire in April 2022, his interview record includes such names as Fidelity International Global CIO Andrew...
Expertise
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