Episode 4

E4. Live Q&A – Return Stacking During Market Corrections

Join Corey Hoffstein, Rodrigo Gordillo, and Mike Philbrick for a special live episode of the Get Stacked podcast, aired on August 6, 2024. This episode dives deep into recent significant market events, discussing the Nikkei's historic 12.5% drop, the yen's trend reversals, and market volatility.

  • Trend following strategies generally act as second responders in a crisis, providing more prolonged multi-week, multi-month type of protection compared to first responders like long volatility or put options.
  • The return stacked portfolio aims to maximize returns while minimizing risk by combining diversifying strategies like trend following and carry, though these strategies will sometimes correlate and other times offset each other, depending on market conditions.
  • When considering adding return stacking strategies to a portfolio, it's important to balance the potential for higher returns with the increased tracking error and risk tolerance, typically suggesting allocations in the 20-30% range to avoid looking too idiosyncratic compared to traditional benchmarks.

(0:00) Introduction to crisis alpha and trend following

(1:22) Podcast introduction, disclaimers, and live Q&A invitation

(4:28) Market events, macro thesis, and volatility in return stacking

(13:46) Defense leveraging and correlation nuances in portfolio management

(24:01) Comprehensive discussion on trend following strategies

(28:32) Historical perspective and recent market trends

(33:17) Equity roles and crisis alpha in diversified trend mandates

(42:30) Exploring futures yield and managed futures carry strategies

(46:49) In-depth analysis of carry factor across asset classes

(51:13) Portfolio positioning with diversification and correlation strategies

(57:30) Case studies of trend and carry under various market conditions

(1:00:08) Strategies for optimal return stacking allocation

(1:03:49) Risk tolerance assessment for return stacking

(1:05:35) Review of historical trend index returns and correlations

(1:06:24) Housekeeping and closing remarks

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About your hosts

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Rodrigo Gordillo

Rodrigo Gordillo is the President and Portfolio Manager at ReSolve Asset Management Global, an alternative asset management firm specializing in globally diversified systematic investment strategies. He co-founded ReSolve Asset Management Inc. in 2015 and expanded to ReSolve Asset Management Global in 2021. Starting his career at John Hancock focusing on pensions, Gordillo transitioned to the ultra-high-net-worth sector with i3 Advisors Inc. He held significant roles at Macquarie Private Wealth, Dundee Goodman Private Wealth, and Richardson GMP, enhancing his expertise in investment decisions and client wealth management.
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Corey Hoffstein

Corey Hoffstein is the CEO and Chief Investment Officer of Newfound Research, a quantitative investment and research firm based in the Greater Tampa Bay Area, United States. Hoffstein co-founded Newfound Research with the aim of assisting investors in proactively managing investment risks through diversification, specifically by leveraging Return Stacking™ strategies. The firm specializes in managing alternative strategies and capital-efficient solutions, enabling the implementation of these innovative investment concepts. In addition to his role at Newfound Research, Hoffstein also serves as a Portfolio Manager at Return Stacked® Portfolio Solutions.