Contrary to intuition, even a fully systematic, rules-based investment strategy benefits from an active ETF structure. This approach avoids third-party index licensing fees and provides crucial flexibility to delay rebalancing during volatile market events, a cumbersome process for index-based funds.

When successful macro traders played the 'Crystal Ball' game, they won not by trading constantly, but by being highly selective. They almost exclusively traded bonds and only acted on the few days where they perceived a high expected Sharpe ratio, avoiding action otherwise.

Markets, technologies, and companies change constantly. The one constant is the human operating system—our biases, emotions, and irrationality. The ability to systematically trade against predictable human behavior is an enduring source of alpha.

In credit markets, where transaction costs can reach 70-80 basis points for high-yield bonds, a systematic strategy's success hinges equally on its trading efficiency as on its return forecasts. A good model is useless if its alpha is consumed by trading costs.

Regal Partners generates its edge not by participating in syndicated deals, but by originating them directly, like an "original equipment manufacturer" (OEM). This "first call" position in areas like IPOs and agricultural debt allows them to influence pricing and structure, creating inherent alpha.

In the post-zero-interest-rate era, the “everything rally” driven by liquidity is over. Higher base rates mean companies must demonstrate fundamental strength, not just ride a market wave. This environment rewards active managers who can perform deep credit selection, as weaker credits no longer outperform by default.

For a multi-trillion dollar manager, agility isn't about small trades but leveraging scale for superior market access and research. The key is acting early to identify risks or opportunities before liquidity dries up, effectively using information advantages to front-run market stress.

While active equity funds often fail to beat benchmarks, active management in fixed income tells a different story. Allspring CEO Kate Burke notes over 90% of their active bond strategies outperform over multiple time horizons, attributing this success to deep, proprietary credit research.

Barclays' research shows that the best investment performance comes from combining fundamental analysts with systematic signals. The key is to filter out trades where the two perspectives diverge, as this method is exceptionally effective at eliminating potential losing investments and generating alpha.