New York - Global Macro is a name put to a new strategy that is working well on Wall Street these days. Yesterday's Wall Street Journal featured an article called
"Global Macro, the Strategic Sequel". The article indicates that the heightened volatility of interest rates, currencies and economic fortunes of countries has given hedge funds utilizing global asset allocation strong returns over the past several months.
Indeed, according to the article CS/Tremont Hedge Fund Index recorded a 17% increase in global macro funds last year, and Chicago-based Hedge Fund Research recorded a 1.7% increase in these funds in January 2008.
The original hedge funds in the 1980s were almost entirely bets on global macro developments. These strategies were popularized by Soros and Robertson et al. Of course, heighten volatility in currencies, inflation, interest rates, yield curve slopes and divergent global growth all point to greater informational inefficiency and hence profit opportunity.
Of course one of the main drivers in the mix is the lumbering and overshooting US dollar in the global capital markets. For those of us that have been around a while, it harkens back to the old savings and investment paradigm. This rule is always in effect, but we forget about it from time to time. When the private sector saving rate is near zero and the government is running a deficit, only international net savings can fill the budgetary gap. Additionally, it is likely that this trend if sustained for some time will create downward pressure on the currency.
In the Integrity Database we have a number of global macro firms that speecialize in this form of analysis. There are 30 firms in our database that specialize in investment strategy, and a great deal more that cover, general economic trends, country risk, political risk analysis, capital flows and policy analysis.
To name a few players in this space: BCA Research, Empirical Research, Heckman Global Advisors, Independent Strategy, Leuthold, Longview and Strategic Economic Decisions.
We include the link below:
online.wsj.com/article/SB120338447365075865.html
Posted at 08:32 am by Thomas Hutchinson
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