Fear and Fundamentals: Brad Barrie on Global Macro, Diversification, and the Market’s Next Big Test

In this episode of Lead-Lag Live, I sit down with Brad Barrie, Co-Founder, Managing Director, and Chief Investment Officer at Dynamic Wealth Group, to unpack how global-macro investing helps investors prepare for uncertainty — not predict it.

From his Halloween-candy analogy on diversification to the risks hiding behind record valuations, Brad explains why hope isn’t a strategy, why true diversification means non-correlation, and how the Dynamic Alpha Macro Fund aims to thrive when others panic.

In this episode:
– Why diversification today often means being “badly diversified”
– How global macro can hedge against high valuations and volatility
– Why the Dynamic Alpha Macro Fund (DYMAX) is built for flexibility
– How technicals and fundamentals work together in a macro framework
– Why investors need multiple drivers of return, not just hope

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Episode Transcript

SPEAKER_00 (00:00):
Yeah, the current macro setup couldn't be better,
right?
With with again, with valuationsstretched as high as they are,
historically speaking, again,anything can happen year by
year, right?
And I'm not here to say thatequities are going to do four
this year or even four nextyear.
We're not big on predicting thefuture, right?

(00:20):
Nobody can accurately predictthe future at all times.
But what I think investorsshould focus on and advisors
should focus on is preparing forthe future, regardless of what
happens.

SPEAKER_01 (00:47):
Stocks are trading near all-time highs, but
underneath the surface, manyinvestors are tightening risk
controls as global growthforecasts move lower, and
uncertainty over policy remainselevated.
The latest global outlook fromthe International Monetary Fund
sees growth slipping and flagsrising risks of a disorderly
correction.

(01:07):
My guest today is Brad Berry,co-founder, managing director,
and chief investment officer atDynamic Wealth Group.
Brad and his team manage theDynamic Alpha Macro Fund, a
global macro strategy built fortimes exactly like this.
Brad, it's great to have youhere.

SPEAKER_00 (01:24):
Thank you, Millie.
Pleasure.

SPEAKER_01 (01:26):
So let's start on a theme.
Many have just celebratedHalloween.
You've said that there arelessons from Halloween that
actually apply to investing.
What do you mean by that and howdoes it connect to how you run
money?

SPEAKER_00 (01:39):
Very much so.
Yeah, and appreciate thequestion.
Um, first off, I would startwith creating analogies with
investing to things thateveryone is familiar with is a
great way to take away thescariness, if you will, of
investing, right?
Because in our industry, we canuse a lot of jargon and a lot of
mumbo jumbo, and it can it canscare investors.

(02:01):
And as an investor, in general,you don't want to be scared,
right?
You don't want to have a scaryportfolio, even though it is
Halloween season.
Um, so using analogies is agreat way for investors and
advisors in general to putthings in perspective so that
they can understand it.
I think one of the key lessonswith um Halloween and investing

(02:23):
that that it can teach us isdiversification.
You know, if you think about it,if there was only one type of
candy in the world, it wouldn'tbe a great world, right?
I mean, it's you need to have avariety of candy.
When you go trick-or-treating asa child or as an adult to each
his own, you want to get avariety of different candy.
And that's part of the fun,right?

(02:44):
And and investing is the sameway.
You want to have a variety ofdifferent types of uh uh of
investing.
We run a global macro fund.
It's definitely uh one of theflavors we think investors
should uh uh should have intheir their portfolio basket, if
you will.

SPEAKER_01 (03:00):
Yeah, and to get a little bit more into that,
you've uh compareddiversification to a bowl of
chocolate.
I love the analogy.
Can you walk us through whatreal diversification looks like?
Because it's it's more than justmixing large caps and and bonds.

SPEAKER_00 (03:14):
Absolutely, right?
It's it's again, we like labelsin our industry, but when it
boils down to it, the thetechnical term is correlation,
right?
How similar are other things,right?
And and I was a financialadvisor for 20 years and I had
many conversations withinvestors, and I would say if
everything in your portfolio isgoing up at the same time, it

(03:35):
usually means everything will godown at the same time.
And my clients would would,they're smart, they figured that
out.
They would finish that sentencewith me.
And so we think truediversification is having
non-correlated investments.
And again, if I we tie it toHalloween, one of the great
combinations in candy is Reese'speanut butter cups.

(03:55):
Taking something that's sweetand yummy and combining it
something that's salty andyummy, peanut butter, the two
together make each better,right?
And that's the same thing withinvesting is having, you know,
not just stocks, because in afrom a global macro standpoint,
if there's a pullback, itlargely won't matter if it's if

(04:16):
it's what sector of stock arelarge or mid or small, if
there's a global pullback,they're highly correlated.
Um and and having somethingthat's non-correlated, like a
global macro strategy, canreally help to add that
diversification and make theend, the end deliverable, um
handy in this case, uh, evenbetter with kind of the salt and

(04:39):
the sweet kind of combined inone.

SPEAKER_01 (04:42):
So to carry a little uh on that point a little
further, uh, for viewers, Imean, who might not live and
breathe this every day, whatexactly is a global macro
strategy and how is it differentfrom a traditional balanced or
tactical allocation?

SPEAKER_00 (04:57):
It's a great question, right?
And in global macro is thrownout there.
I like to keep things verysimple.
Break it down into two words,global and macro.
Global means anything andeverything in the globe.
It could be stocks, it could bebonds, it could be commodities,
it could be precious metals, itcould be agriculture, anything
and everything, but it's not asthe name of that recent movie,

(05:20):
everything everywhere all atonce, right?
So with our approach, we're veryselective.
And it's not having everythingin the portfolio, it's
understanding where are thesupply and demand imbalances in
the macro picture and being ableto identify those and take
actions or exposure whenappropriate.

(05:42):
So we don't have to be ineverything everywhere all at
once.
You don't want to do that, um,uh obviously.
Um you want to be able to getinto things and take kind of
that macro picture.
And again, that's global.
So what does macro mean?
Macro means big picture.
So we're not focused on stock bystock.
Is Apple better than Google,better than Microsoft?

(06:05):
It's looking at the big picturethemes, if you will.
Um example of a theme uh couldbe the growth of the need for
electricity in the world,whether it's because of electric
vehicles, because of AI, datacenters, population development,
you name it, right?

(06:25):
A micro uh focus could bepicking winners and losers,
right?
Is it going to be this electriccompany, this electric vehicle
company, this you know, AIcompany?
But it a macro pitcher wouldsay, what do all those need?
All those need electricity.
Well, what do you need totransfer electricity?
You need copper, right?

(06:46):
So long term, we're optimisticon copper.
We don't currently have aposition on copper because we
also take technicals and andprice moves and other things
into um the equation.
But long-term thematic copper uhis something uh something that
we like.
That's a macro example of uh ofwhat we're talking about.

SPEAKER_01 (07:08):
Right.
So my next question, you'vetouched on this just a little
bit right now, but why shouldsomeone consider adding a global
macro component to theirportfolio right now?
Talking specifically about youknow what what problems does it
solve in today's environment?

SPEAKER_00 (07:22):
Great question.
Uh high level, it solves twomain problems.
One is diversification, which Itouched on.
You know, uh traditionaldiversification, or sometimes we
also call it basic assetdiversification or B A D for
short, um, tends to be aportfolio that might look like a
bunch of pretty little colors.
Um, but in reality, when youlook at the correlation over the

(07:46):
last 15 years, it's really twomain colors.
And then if you look at 2022,when we really needed
diversification, it was reallyone color, right?
Global macro, on the other hand,can provide diversification over
that 14, 15 year timeframe, aswell as years like 2022, when
both stocks and bonds andinternational all went down.

(08:09):
Global macro was was wasnon-correlated, performed very
well.
So the need for diversificationis one, but also again, we're
Halloween season, the market isscary valuations, right?
We have very scary highvaluations.
The chiller PE cape ratio is acyclically adjusted uh valuation

(08:30):
metric.
We're at about 40 right now,which is historically extremely
high.
And when you look at theanalysis um uh on this type of
scatter plot, what you see iswhen you start with high
valuations, the SP 500's futurefive-year returns are very
muted.
We're near zero.

(08:50):
Um, but when you compare that toglobal macro as a strategy,
global macro as a strategy, whenyou start with high valuations
in equities, tends to performvery well.
If you look at midline uhvaluations, normalized
valuations, what you also see isglobal macro does in line with
stocks.

(09:11):
Um and yes, if you look at thechart and you see that all the
way to the left, that whenequity valuations start really,
really low because quitehonestly, they had the snot beat
out of them, yes, equities willoutperform global macro.
Um, but that's why in our uhmutual fund, the dynamic alpha
macro fund, ticker symbol dymix,dymix, um, everything we do is

(09:33):
macro, but we have a macroexposure to stocks at all times,
and we have the global macrolong short futures exposure as
well to try to take advantage ofuh of all sides uh of investing
from a macro side.

SPEAKER_01 (09:47):
Okay, and um you've talked about why now matters.
The timing the market isn'tabout guessing direction, but
recognizing cycles.
What can you tell our viewersabout the current macro setup
and and what that tells youabout the moment for uh global
macro?

SPEAKER_00 (10:02):
Yeah, the current macro setup couldn't be better,
right?
With with again, with valuationsstretched as high as they are,
historically speaking, again,anything can happen year by
year, right?
And and I'm not here to say thatequities are going to do poor
this year or even poor nextyear.
We're not big on predicting thefuture, right?

(10:23):
Nobody can accurately predictthe future at all time.
But what I think investorsshould focus on and advisors
should focus on is preparing forthe future, regardless of what
happens.
And you prepare for the futureby having um multiple drivers of
return, right?
And look, we all hope for thebest, right?

(10:44):
We all hope the market continuesto do well, and we hope for
positive trade deals, and wehope for positive government
actions, right?
But but hope is not a plan,right?
If you're banking on hope, hopeis not a solid plan.
You have to be prepared for arange of possible outcomes.
And that to me is what globalmacro investing is all about:

(11:06):
being tactical, being flexible,looking for supply and demand
imbalances.
Um, and when the volatility ishigh and valuations are high,
macro investing is ripe fortaking advantage of
opportunities to help investors,especially the way that we do
it, which is differentiatedfocus on a fundamental approach.

(11:28):
Um, we're not focused on quantor black box or trend following.
It's not what we do.
We complement those strategies,actually, because we're
non-correlated to thosestrategies.
Um, but with our fundamentaldiscretionary approach, now is a
you know perfect time for uh fortaking advantage of strategy

(11:48):
like that.
Yeah.

SPEAKER_01 (11:49):
And then so next, I wanted to talk about the the
how.
If an investor or an advisorwants to allocate to a strategy
like yours, what's what's thepractical way to do it?
And how does a fund like DynamicAlpha Macro fit into a
diversified portfolio?

SPEAKER_00 (12:03):
Great question.
And it's really why uh why welaunched the mutual fund to make
this type of strategy availableto retail investors and
financial advisors alike, um,bringing this kind of high-level
institutional type of strategyto everybody, right?
Um what we see advisors doing umfrom an allocation standpoint,

(12:24):
because we're a little unique inthe alternative space.
A lot of alternatives would bemore bond-like, lower return,
uh, low volatility type ofstrategy.
Uh, our volatility over timetends to match equities.
So our goal as a as a as a fundis to deliver equity-like
performance or better with lowcorrelation to equity.

(12:45):
So we see advisors allocatingfrom equities into our fund,
allocating from multi-strategyfunds, so maybe a balance fund,
a multi-asset fund, otheralternatives uh into uh into our
fund uh dimex.
Um if you look at our returns,uh, and we'll share the the
results on the screen, but butour our numbers have been able

(13:08):
to deliver what our target hasbeen, right?
Where you look at our statisticsand you'll see that that our
returns have matched or actuallybeaten the SP 500 year to date.
Our since inception is slightlymore than the SP, which we're
very proud of.
Um equally, if not more proudof, is our our our

(13:29):
non-correlation and our riskmeasures.
So again, our non-correlation tothe SP 500 is 0.26.
And again, not to get tootechnical, but there's something
called upside-downside captureratio, which simplistically
tells us in the market goes up,how much on average do you go
up?
And if the market goes down, howmuch on average do you go down

(13:51):
from a historical standpoint?
And we're a little over 70%upside capture with about a 19%
downside capture.
And in the long run, if youthink about it, as long as
you're capturing more up thanyou are on the downside, that
can lead to outperformance.
And by protecting on thedownside, it can really help to

(14:14):
just target a smoother returnexperience.
Um, and that's at the end of theday, what investing should be
all about, right?
Generating more consistentreturns.
They really help investors andadvisors meet their goals.

SPEAKER_01 (14:29):
It's a fantastic explanation.
Brad, before we wrap up, foranyone watching who wants to
read more, see more of uh thebrochure that we have uh been
showing, see the full frameworkfor Dynamic Alpha Macrofund,
where can they find thebrochure?
Where can they connect with you?

SPEAKER_00 (14:46):
Absolutely.
So you can uh you can go to ourmain website, dynamicwg.com.
Um, you can find our brochurethere.
Uh I post on LinkedIn uhregularly, as well as Twitter,
as well as um a Substack.
We have a Substack.
If you can go to our Substack,uh just search Dynamic Wealth
Group on Substack, and you canuh subscribe to our regular

(15:07):
posts.
I also put out regular uh shortvideos once a week on LinkedIn.
Um feel free to reach out.
We're always happy to talk to uhto anyone.

SPEAKER_01 (15:15):
Right.
Thanks so much for joining meand thanks to everyone for
watching.
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Lead Lake Live.