Tail Hedging & Trend Following in 2025 | July Round Up

Submit your questions! Email: jose@alphaarchitect.com Is Tail Risk Hedging Still Worth It? And What’s Up With Trend Following and International Stocks? In this episode of the Alpha Architect Roundup, we tackle the recent market dip, the muted VIX, and what that means for tail risk hedging strategies. While investors hoping for a crash were left disappointed, the conversation turns to whether protection still has a place in a portfolio. We also dive into the struggles of trend following during whipsaw markets, the subtle resurgence of international equities, and how to think about weighting factors and diversifiers. From AI in factor research to why keeping it simple may still be the best edge, this episode offers a wide-angle lens on risk management, return generation, and investor behavior in today’s market. We discuss: • Why equities remain the dominant return driver—and where value and momentum fit in. • How to think about tail risk hedging when the VIX stays muted. • Lessons from comparing the 2020 crash to the 2025 market dip. • How trend following performed recently, and whether it’s still a valid strategy. • Why implementation (slow vs. fast signals) matters in managed futures. • The nuanced role of trend as a diversifier vs. portfolio protection. • A data-backed argument for international stocks—and whether the trend is sustainable. • What investors are (and aren’t) saying about international allocations. • How to think about weighting schemes in factor and diversifier portfolios. • The pros and cons of AI in factor investing—and why simplicity and transparency still win. Follow the Team on X: Wes Gray, PhD: https://x.com/alphaarchitect Jack Vogel, PhD: https://x.com/jvogs02 Ryan Kirlin: https://x.com/RyanPKirlin Jose Ordoñez Jr: https://x.com/JOrdonezJr Subscribe for more insights on diversification, market trends, and smart investing strategies! For more educational resources, visit: https://www.alphaarchitect.com Disclosures: https://www.alphaarchitect.com/disclosures