Lest we forget

Of all the crises of the last 10 years, the most recent had the most casualties. Thanks to their sound portfolio construction, global macro hedge funds were not one of the fallen

For most of us running money, 2008 was a year not to forget: portfolio construction, liquidity, diversification and correlation were on most asset allocators’ minds. But it was not a standalone event. In the last 10 years, there has been the Asian crisis, the Russian bond crisis, the tech bubble and the US corporate credit crisis. All of these events had an impact on portfolio construction. One area that has consistently outperformed during these events has been global macro hedge funds. Global macro managers perform top-down research on a global basis. The manager seeks to identify a...