Stockholm (HedgeNordic) – In an era where financial markets are complex and volatile, the methods traders use to navigate these turbulent waters can make all the difference to success or failure of a trading strategy. The debate between systematic and discretionary trading has long been a focal point in the trading community. Each approach has its proponents, merits, and challenges, and understanding these can help traders and investors make informed decisions about their strategies.
While the debate between systematic and discretionary trading continues, the reality for many traders and firms is a blend of both approaches. Hybrid strategies that combine the strengths of quantitative models with human oversight and discretion are increasingly common. This synergy allows for the objectivity and efficiency of algorithms while retaining the flexibility and adaptability of human judgment.
We are challenged to explore this intersection, providing insights into how traders can leverage the best of both worlds. We dive into the latest advancements in algorithmic trading, machine learning, and artificial intelligence, while also highlighting the value of human intuition and expertise. Our goal is to equip you with the knowledge and tools to navigate the ever changing landscape of trading, whether you lean towards systematic methods, discretionary approaches, or a combination of both.
On this journey we uncover the strategies, innovations, and thought leaders shaping the future of systematic trading. In HedgeNordic’s report on systematic trading, we try to find the “Quantitative Edge,” where the art and science of trading converge. The publication starts off an exploration of “Investing in an Age of Data Overload” by Amadeo Alentorn, Lead Investment Manager specializing in Systematic Equities at Jupiter Asset Management. In “Transtrend’s Commodity DNA Shines,” Transtrend’s Head of Portfolio Management, Toni Budimir, sheds light on the significance of commodities as an important source of returns and diversification, offering a differentiating perspective on a range of topics, including responsible investing.
Kathryn Kaminski and Scott Sample from AlphaSimplex explore “Innovation in Managed Futures,” focusing on the adoption of Managed Futures ETFs and their advantages. Subsequently, Joseph Waldstein and Christophorus Lehmann from Austrian CTA manager SMN delve deeper into “SMN’s Blend of Continuity and Change.”
Bjarne Graven Larsen, former CIO at both the Danish pension fund ATP and the Canadian Ontario Teachers’ Pension Plan (OTPP), addresses a common shortfall in most pension fund portfolios and introduces “Qblue’s Systematic Solutions to Investor Needs.” Andrew Beer, co-founder of Dynamic Beta investments (DBi) – a partner of iM Global Partner, examines the “Pros and Cons of Replicating “All- Stars” Trend-Followers.”
Michael Hayes from MSCI discusses “The Systematic Revolution and ‘Equification’ of Fixed Income,” noting that “a systematic revolution is brewing in fixed- income credit, and systematic credit will resemble systematic equity both in approach and in scale in the next five to ten years.” Joakim Stenberg, co-founder of the now-closed hedge fund boutique Nordic Cross Asset Management, presents a “Systematic Index- Enhanced Avenue to Swedish Micro Caps.”
Första AP-fonden (AP1), the First Swedish National Pension Fund, has devoted more resources over time to develop and expand its own quant team to leverage the advantages of systematic strategies. Patrik Nyman and Dmytro Sheludchenko from AP1’s Asset Allocation and Quantitative Strategies team share more insights into “Systematic Strategies in Action at AP1.”
In “Where Next for Commodities, as Quants Take Over,” Tor Svelland, founder and CEO/CIO of commodity-focused hedge fund manager Svelland Capital, engages in a discussion with Alan Dunne on a Global Macro edition of Top Traders Unplugged about the dynamic forces shaping the global commodity markets. The publication concludes with Linus Nilsson’s discussion on “Building a Robust Portfolio – A New Heuristic for Portfolio Diversification.”
We hope you enjoy the read and find some interesting insights and food for thought.
Please find the report here. Happy reading!