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April 12, 2006
Global macro hedge funds facing dearth of talent
Even as investors are raising their exposure to global macro hedge funds because of their potential to make money in volatile markets, a dearth of talent in the sector means returns could disappoint. Global macro hedge funds take directional bets in stock, bond, currency and commodity markets using economic trends.
For these funds, opportunities to make money should be many and varied given expectations of a liquidity withdrawal, which could create volatility and trigger new trends. Volatility in commodity and emerging markets, forecasts of a declining dollar and rising U.S. Treasury bond yields are all potential opportunities for these money managers.
The problem, however, seems to be that many of the people managing global macro hedge funds seem to have a poor understanding of the US Treasury bond market and this can hurt returns.
Read more: Dearth of talent may hit global macro hedge funds
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