The evolution of global macro strategies

Tactical asset allocation models have come a long way but are still evolving in their search for under-exploited alpha sources

Global macro strategies generally invest in stocks, bonds, and currencies worldwide. More specifically, they take positions in entire markets or market segments, rather than in individual securities. Typically, they are implemented using derivatives because they provide liquidity, have lower transaction costs and offer the potential for efficient use of leverage. In the past, most global macro strategies were thematic and discretionary. Typically, such funds were quite concentrated and their opportunities to add value were episodic. Examples include George Soros' Quantum Fund and Julian R...