The following extract is a Top Traders Unplugged summary of a conversation between the podcast hosts Niels and Alan with Philip Seager, Head of Absolute Return at Capital Fund Management.
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Capital Fund Management has been at the forefront of quantitative investing since 1991, beginning as a trend-following manager and expanding into one of the most research-intensive multi-strategy quant firms in the world. Philip Seager has been central to that evolution, working across systematic global macro, trend following product development, and investor education for over two decades.
Seager’s argument about diversification is both simple and underappreciated. Most investors think they are more diversified than they actually are. The decade-long equity rally created a false sense of protection. Private markets, credit, infrastructure: in many cases these instruments carry embedded equity premia that only reveal themselves during stress. True uncorrelation, Seager argues, is rare. Systematic macro and adapted trend strategies represent one of the few genuine sources of it.
He co-authored the landmark research paper ‘Two Centuries of Trend Following,’ which documented the persistence of trend effects across asset classes and time horizons stretching back over a hundred years. That body of work informs his conviction that trend following is not an anomaly to be arbitraged away but a behavioural phenomenon tied to how human participants process information and act under uncertainty. The CFM conversation on TTU is a clear-eyed tour through that thinking.
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