How can hedge strategies help in a rising rate environment?

David Saunders, founding managing director of K2 Advisors, Franklin Templeton, explains how an allocation to hedged strategies can help investors outperform.

With the Federal Reserve announcing it held interest rates on 28 October, perpetuating an almost a decade long zero interest rate policy, many investors are bracing themselves for the next meeting in December when the central bank will finally move closer to raising rates. While there is also speculation that the central bank will delay until 2016, we believe investors should prepare their 60/40 investment portfolio of equities and bonds for the eventuality of a raising rate environment. Moreover, for a generation or more, investors have come to know the fixed income portion of their por...