I mentioned in my posts this weekend hedge funds in relation to the stronger US Dollar and also when I reviewed Man Group the hedge fund manager. In passing I suggested that the current market conditions could be more favourable for global macro type hedge funds which have had a tough time of it in recent years and provided fairly dull returns, although they did well in the years running up to and over the financial crisis.
The problem for individual investors is that hedge funds, if you want to invest in them, are generally only open to high net worth individuals / mega rich. However, there have been a few funds listed on the London Stock Exchange over the years which offer access to these strategies in a listed, easily traded vehicle. These tend to act as feeder funds to their larger unlisted funds.
One such fund define their Macro Strategies as follows:
"Macro": multi-asset global markets, mainly directional (for the Fund, the majority of risk in this category is in rates)
"Rates": developed interest rates markets
"FX": global FX forwards and options
"EMG": global emerging markets
"Equity": global equity markets including indices and other derivatives
"Commodity": liquid commodity futures and options
"Credit": corporate and asset-backed indices, bonds and CDS
"Systematic": rules-based futures trading
"Discount Management": buyback activity for discount management purposes
Summary & Conclusion
This is just a thought that with the recent macro moves and after such a strong performance in conventional asset classes, this could be a reasonable time to consider diversifying into something that may not be as correlated and which could do well if other traditional assets start to struggle or fall. Given the performance in recent years they have also drifted onto a small discount.
If that is of interest you can open today's Advent Calendar Window to learn more about an example of this type of fund, but once again it is just a suggestion and not a recommendation and the past is no guide to the future and investments will go up and down.