Investment Insights From A 20-Year-Old Hedge Fund Manager

The managed investment fund Marchese Investments launched its first account in the autumn of 2015. At that time, the company's founder and sole account manager, Julian Marchese, was just 19 years old.

Marchese joined Friday's edition of Benzinga's PreMarket Prep morning show to discuss his fund management philosophy and how he optimizes his various investment strategies.

Plenty Of Hard Data

What Marchese made clear very quickly is that the trading emphasis of Marchese Investments' fund management is on back-tested historical and technical data. "I'm a quantitative multi strategy manager. Basically, I'm trying to combine a lot of unique strategies that are in some ways fundamentally uncorrelated with each other, but that have positive expectancy. The idea is that the whole is greater than the sum of its parts. You achieve that by having strategies that trade different products and that trade different time frames."

The success of Marchese's investments relies on a dedication to seeking out and researching new strategies to complement his fund's portfolios. In turn, the implementation of the various portfolio requires the versatility that automated trading provides. "To manage 10, 20, 30 strategies at once, you need to have it automated in some ways. A human just won't be able to do it. As a money manager, I want to make money every year. And the most consistent way to do that is through multiple strategies."

At A High Frequency

Marchese's specific approach to trading is based around minimizing risk through diversification, particularly with ETFs. "I think it's better to find robust simplistic strategies so you can be confidant that they are taking advantage of a specific edge, you let the validity of multiple systems take out and diversify your risk."

When asked whether he had his any on any specific equities, Marchese deferred to the frequency of his trades and his preference toward trading based on indexes, specifically the S&P 100 (OEX). "I don't really look at individual stocks that way. It's more so just taking a look at a stock as it's in an index, I only have one strategy in my book dedicated to trading individual stocks. Most of the positions are in and out within a few days."

For more on how he first started his trading career, click here to read Benzinga's recent interview with Julian Marchese.

Listen to our full conversation with Marchese at the 12-minute mark in the clip below.

PreMarket Prep is a daily trading ideas show that focuses on technical analysis and actionable short term trades. You can listen to the show live every morning from 8–9 ET here, or catch the podcast here.