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Hedge funds position for persistently high inflation in 2023

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Many global hedge fund managers are seeking exposure to commodities and bonds in 2023 as they prepare for a year of persistently high inflation, according to a report by Reuters.

The report cites a Reuters’ survey of 10 global asset and hedge fund managers as revealing that the majority believe that commodities are undervalued and should perform well as global inflation remains elevated during 2023.

Their other top picks for a high-inflation environment included inflation-linked bonds to shield against price rises and selective exposure to corporate credit.

Equites are the assets to either avoid or short-sell according to the survey respondents, particularly if the Federal Reserve keeps raising rates to fight inflation, while long-short equity strategies are also expected to remain out of favour with investors after last year’s underperformance. Macro-driven strategies that exploit volatility and can be long or short any asset meanwhile, are expected to continue to pull in investor cash.

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