Michael Hunstad's guest appearances

Michael Hunstad

[i3] Institutional Investment Podcast

Flirting with Models

Market Currents

Tobias Carlisle

Daniel Grioli

Corey Hoffstein

Michael Recce

Fred Schebesta

Eric Ervin

Bill Mitchell

Jeremy Grantham

Ned Davis

Jack Vogel

Michael Green

Brian Singer

Michael Kelly

Benjamin Graham

Kai Wu

OwlTail

Chris Shipley

Does value investing still work? After many years of underperformance, value stocks have shown signs of life in 2021 as investors’ conviction in strong economic recovery has gained momentum.  Is this a turning point for value, or simply a short-term pop? Will value redeem itself, or will investors find their way back to growth stocks over the long term? Is something different this time?  To help investors answer these important questions — which have important portfolio implications —  Northern Trust’s Katie Nixon is joined by the firm’s head of quantitative strategies, Michael Hunstad, and head of fundamental equities, Chris Shipley. In this episode, you will learn:  If value really is a compensated risk factor  The valuation metrics and other criteria Northern Trust uses to define value and identify opportunities   The reasons behind value’s underperformance relative to growth in recent years What needs to happen for value to sustainably outperform again How to avoid value traps  If and how to maintain exposure to both value and growth stocks   Listen in as Katie, Mike and Chris explore the evidence and provide practical suggestions for investors grappling with the growth versus value conundrum.  Resources:  Northern Trust | Katie Nixon | Michael Hunstad | Chris Shipley NTAC:3NS-20

Does value investing still work? After many years of underperformance, value stocks have shown signs of life in 2021 as investors’ conviction in strong economic recovery has gained momentum.  Is this a turning point for value, or simply a short-term pop? Will value redeem itself, or will investors find their way back to growth stocks over the long term? Is something different this time?  To help investors answer these important questions — which have important portfolio implications —  Northern Trust’s Katie Nixon is joined by the firm’s head of quantitative strategies, Michael Hunstad, and head of fundamental equities, Chris Shipley. In this episode, you will learn: <ul> <li>If value really is a compensated risk factor </li> <li>The valuation metrics and other criteria Northern Trust uses to define value and identify opportunities  </li> <li>The reasons behind value’s underperformance relative to growth in recent years</li> <li>What needs to happen for value to sustainably outperform again</li> <li>How to avoid value traps </li> <li>If and how to maintain exposure to both value and growth stocks </li> </ul> Listen in as Katie, Mike and Chris explore the evidence and provide practical suggestions for investors grappling with the growth versus value conundrum.  Resources:  <a href="https://www.northerntrust.com/united-states/home" rel="nofollow" target="_blank">Northern Trust</a> | <a href="https://www.northerntrust.com/united-states/insights-research/wealth-management/experts/nixon-katie" rel="nofollow" target="_blank">Katie Nixon</a> | <a href="https://www.northerntrust.com/united-states/insights-research/investment-management/experts/hunstad-mike" rel="nofollow" target="_blank">Michael Hunstad</a> | <a href="https://www.linkedin.com/in/christophershipleyntam" rel="nofollow" target="_blank">Chris Shipley</a> NTAC:3NS-20

Value’s Uprising: Fête or Renaissance? – with Michael Hunstad and Chris Shipley

Michael Hunstad is Head of Quantitative Research for Northern Trust Asset Management. Michael and his team have produced a report which analyses risk in more than 200 portfolios and over a 1,000 equity strategies over a period of four years. They found that there are six drivers of unintended outcomes in portfolios, including uncompensated risk and unintended style biases. We speak with Michael about the report, how to avoid these traps and how the pandemic would affect the results. Enjoy!Overview of podcast with Michael Hunstad:1:30 Starting out in investing2:30 Changes in the hedge fund industry4:00 Unrewarded risks in institutional portfolios are as high as 50pc of the portfolio6:30 Unrewarded doesn’t mean unknown. To what degree do investors know about these risks?8:20 Is it possible to get rid of unrewarded risk?	11:00 The Cancellation Effect, capacity and diversification.13:00 Active share cancellation16:30 It is not about how concentrated or diffuse a manager is, but what remains after the portfolio is put together17:30 Unintended style biases.18:30 We still have a high conviction in the value factor. We feel we are in a cycle and it is always darkest before dawn20:45 I get concerned when I see the multiple dislocations that we see today22:30 Chasing returns and manager selection24:30 On return cycles of manager outperformance27:00 Is manager blending an underestimated art?28:45 Does this mean we should all just go passive and factors?30:00 How would the pandemic affect the findings of the report?30:40 When a risk is not properly priced, it is usually uncompensated32:00 Pandemic and structural changes for the investment climate33:00 We can see an increase in volatility spikes and it is accelerating 35:00 As a former algorithmic trader, I’m also concerned about the amount of algorithmic trading that is occurring at the moment36:00 The future of equities is very much about how you manage these tail risk events.

Michael Hunstad is Head of Quantitative Research for Northern Trust Asset Management. Michael and his team have produced a report which analyses risk in more than 200 portfolios and over a 1,000 equity strategies over a period of four years. They found that there are six drivers of unintended outcomes in portfolios, including uncompensated risk and unintended style biases. We speak with Michael about the report, how to avoid these traps and how the pandemic would affect the results. Enjoy! Overview of podcast with Michael Hunstad: 1:30 Starting out in investing 2:30 Changes in the hedge fund industry 4:00 Unrewarded risks in institutional portfolios are as high as 50pc of the portfolio 6:30 Unrewarded doesn’t mean unknown. To what degree do investors know about these risks? 8:20 Is it possible to get rid of unrewarded risk?	 11:00 The Cancellation Effect, capacity and diversification. 13:00 Active share cancellation 16:30 It is not about how concentrated or diffuse a manager is, but what remains after the portfolio is put together 17:30 Unintended style biases. 18:30 We still have a high conviction in the value factor. We feel we are in a cycle and it is always darkest before dawn 20:45 I get concerned when I see the multiple dislocations that we see today 22:30 Chasing returns and manager selection 24:30 On return cycles of manager outperformance 27:00 Is manager blending an underestimated art? 28:45 Does this mean we should all just go passive and factors? 30:00 How would the pandemic affect the findings of the report? 30:40 When a risk is not properly priced, it is usually uncompensated 32:00 Pandemic and structural changes for the investment climate 33:00 We can see an increase in volatility spikes and it is accelerating 35:00 As a former algorithmic trader, I’m also concerned about the amount of algorithmic trading that is occurring at the moment 36:00 The future of equities is very much about how you manage these tail risk events.

52: Northern Trust AM's Michael Hunstad – Unintended Equity Risks

In this episode I speak with Dr. Michael Hunstad, Head of Quantitative Strategies at Northern Trust. Our conversation centers around the four key trends Michael is seeing among institutional allocators in the factor space today. These trends are (1) the adoption of factors to manage concentration risk in market-cap weighted benchmarks, (2) a move from single- to multi-factor implementations, (3) using factors to de-risk equity exposure, and (4) a tactical tilt towards value. But Michael isn’t afraid to get in the weeds. He discusses the risks of unintended exposures at length and at one point even explains the importance of matching decay speeds of different factor signals within multi-factor implementations. For those interested both in the macro trends and the micro details of factor investing, this is not one to miss. I hope you enjoy my conversation with Dr. Michael Hunstad.

In this episode I speak with Dr. Michael Hunstad, Head of Quantitative Strategies at Northern Trust. Our conversation centers around the four key trends Michael is seeing among institutional allocators in the factor space today. These trends are (1) the adoption of factors to manage concentration risk in market-cap weighted benchmarks, (2) a move from single- to multi-factor implementations, (3) using factors to de-risk equity exposure, and (4) a tactical tilt towards value. But Michael isn’t afraid to get in the weeds. He discusses the risks of unintended exposures at length and at one point even explains the importance of matching decay speeds of different factor signals within multi-factor implementations. For those interested both in the macro trends and the micro details of factor investing, this is not one to miss. I hope you enjoy my conversation with Dr. Michael Hunstad.

Michael Hunstad - Institutional Trends in Factor Investing (S3E9)