Key Takeaways
- • Dave Fishwick founded and led M&G's Episode macro strategy for 24 years, building a behavioral macro investing approach that profits from reversals and turning points rather than forecasting-oriented discretionary macro or trend-following CTA strategies.
- • The Episode strategy has generated a distinct return profile since 2000 by tactically allocating across developed market equities, bonds, and credit alongside emerging market positions, with performance regularly recognized by The Hedge Fund Journal's UCITS Hedge Awards.
- • Fishwick's macro investing career began in 1987 as a European economist just before the stock market crash and hurricane in the UK—a formative experience that shaped his approach to managing event risk, volatility, and interest rate anchoring through subsequent market cycles including 2022.
- • Early in Fishwick's career (1992), macro managers including George Soros and Scott Bessent profited from currency crashes of the Pound and Swedish Krona out of the Exchange Rate Mechanism, though information asymmetries and slow data delivery at the time created significant trading advantages for informed participants.
Summary
Dave Fishwick's 24-year tenure leading M&G's Episode macro strategy represents one of the longest continuous leadership periods in behavioral macro investing. Rather than relying on econometric forecasting models or systematic trend-following approaches, the Episode strategy identifies tactical opportunities around market reversals and turning points across multiple asset classes and geographies.
Since its inception in 2000, Episode has maintained a dynamic allocation strategy encompassing long and short positions in developed market equities, bonds, and credit instruments, complemented by tactical long exposure to emerging market equities, bonds, and credit. This diversified approach has earned consistent recognition through The Hedge Fund Journal's UCITS Hedge Awards, reflecting the strategy's consistent ability to navigate complex market environments.
Fishwick's formative experience in macro investing began in 1987, when he worked as a European economist just two months before the October stock market crash and the southeastern UK hurricane. That experience profoundly shaped his understanding of market behavior and investor psychology. As Fishwick reflects, "I still remember the shocked faces of colleagues aged in their 30s and 40s, and this shows how humans respond to events and emotional events." The disconnect between violent market movements and economic fundamentals—such as German economic data—demonstrated to him that traditional econometric models could not reliably predict asset price gyrations. This insight informed his risk management philosophy through subsequent volatile periods, particularly during 2022 when similar dynamics around event risk, volatility anchoring, and interest rate shifts tested market participants.
The early 1990s further illustrated the evolving information landscape in macro investing. During the 1992 Exchange Rate Mechanism crisis, when the Pound and Swedish Krona crashed, prominent macro hedge fund managers including George Soros and Scott Bessent capitalized on currency weakness. At the time, however, Fishwick was unaware of their positioning. The delayed nature of economic data delivery—with critical information arriving by post rather than in real-time—and private deliberations among policymakers about unsustainable exchange rates created information asymmetries that established significant advantages for macro managers with superior insight and positioning.
Since its inception in 2000, Episode has maintained a dynamic allocation strategy encompassing long and short positions in developed market equities, bonds, and credit instruments, complemented by tactical long exposure to emerging market equities, bonds, and credit. This diversified approach has earned consistent recognition through The Hedge Fund Journal's UCITS Hedge Awards, reflecting the strategy's consistent ability to navigate complex market environments.
Fishwick's formative experience in macro investing began in 1987, when he worked as a European economist just two months before the October stock market crash and the southeastern UK hurricane. That experience profoundly shaped his understanding of market behavior and investor psychology. As Fishwick reflects, "I still remember the shocked faces of colleagues aged in their 30s and 40s, and this shows how humans respond to events and emotional events." The disconnect between violent market movements and economic fundamentals—such as German economic data—demonstrated to him that traditional econometric models could not reliably predict asset price gyrations. This insight informed his risk management philosophy through subsequent volatile periods, particularly during 2022 when similar dynamics around event risk, volatility anchoring, and interest rate shifts tested market participants.
The early 1990s further illustrated the evolving information landscape in macro investing. During the 1992 Exchange Rate Mechanism crisis, when the Pound and Swedish Krona crashed, prominent macro hedge fund managers including George Soros and Scott Bessent capitalized on currency weakness. At the time, however, Fishwick was unaware of their positioning. The delayed nature of economic data delivery—with critical information arriving by post rather than in real-time—and private deliberations among policymakers about unsustainable exchange rates created information asymmetries that established significant advantages for macro managers with superior insight and positioning.
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