Unhedged US exposure among corporates and pensions offers cheap options play for macro funds

George Papamarakakis, North Asset Management

Last year provided some optimism for global macro hedge funds, ending the year up 6.50 per cent according to eVestment’s aggregated hedge fund performance data. And there are signs that 2020 could offer good opportunities to make upside, as macro traders position themselves for higher inflation in Europe and investor rotation out of US equities.

“We’re not constructive equities. We want to be on the front foot when bad things happen like the Iran incident. We had a good couple of weeks being short equities, long oil but for the last two weeks we’ve given back some of those gains as the markets have moved back up. If it stays on this trajectory, although the sources of returns might differ I think most macro strategies will probably meet in the middle by year-end,” says one US-based global macro manager, who asks not to be named.

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