🎯 (12 Updates Strategies) Macro Hedge Funds 👇
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Macro Hedge Funds
(12 Updates Strategies) 👇
✔ “Investors banking on diversification would have been disappointed in May. Global equities fell 1.1% while US high-grade debt lost 1.2%. Lackluster returns reflect range-bound markets that are struggling to price the impacts of numerous trends.”
✔ “We believe that persistent risks may mean macroeconomic uncertainty will stay high. Gauges of US equity market volatility arguably do not reflect these risks—the VIX Index stands below 15 and at post-pandemic lows.”
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HIGH UNCERTAINTY AND VOLATILITY 👇
✔ “Macro hedge funds aim to take advantage of shifting macroeconomic trends and market dislocations during transition periods.”
✔ “They generally avoid less liquid credit and other non- liquid investments and tend to have low “participation risk” in crowded trades.”
✔ “These strategies tend to outperform diversified hedge fund benchmarks (HFRI Fund Weighted) during periods of higher interest rate volatility, based on Bloomberg and BarclayHedge data back to 1998.”
PORTFOLIOS IN SLOWDOWN OR RECESSIONARY PHASES 👇
✔ “While history is no guarantee of future performance, macro hedge funds have generally helped to reduce portfolio swings, especially during times of economic slowdown or recession.”
✔ “Between 1997 and 2022, macro hedge funds generally outperformed other hedge fund strategies (HFRI Fund Weighted Index) by 1 percentage point (1997 to June 2022) during manufacturing slowdowns.”
✔ “Out performance by 12 percentage points (over the same period) during manufacturing recessions (all based on BarclayHedge and HFR data, using global industrial production as a business cycle indicator).”
LIMIT LOSSES DURING MARKET DECLINES 👇
✔ “Historically, macro hedge funds have shown shallower peak-to-trough losses during market selloffs.”
✔ “Discretionary macro recorded a maximum drawdown of 8.1% over the 1997–2022 data period previously cited, compared to a 50.9% max drawdown for US equities (S&P 500 Total Return Index).”
✔ “And while discretionary macro funds exhibited modest positive return correlations to global bonds (0.28) and global equities (0.54), we would note that macro hedge funds have delivered negative return correlations to equities during periods of acute market stress.”
✔ “This suggests discretionary macro funds may even be able to post gains during times when equity markets post particularly steep losses.”
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Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.