An opportunistic hedge fund investment strategy that seeks to profit by making leveraged bets on anticipated price movements of global stock markets, interest rates, foreign exchange rates, and physical commodities. The portfolios of these funds can include stocks, bonds, currencies, and commodities in the form of cash or derivatives instruments.
Managers employ a ‘top-down’ approach to capitalise on changes in the global macroeconomic environment through active trading in the various capital markets.
One of the oldest hedge fund strategies characterized by a broad range of strategic options. It is based upon a macroeconomic analysis of major developments in the political and economic spheres. The fund manager seeks to identify at an early stage breaks in trends affecting equity, interest rate or currency movements or shifts in the global economy and to profit from them. A hallmark of Global Macro is the use of derivatives based on crude oil and gold. However, a much more significant use of commodity-based derivatives is the Managed Futures approach.
An investment strategy that aims to profit from changes in global economies, typically brought about by shifts in government policy that impact interest rates, in turn affecting currency, stock, and bond markets.
A global or international manager who employs an opportunistic, top-down approach, following major changes in global economies and seeks to realize profits from significant shifts in global interest rates, important changes in a country's economic policies, etc.
The term global macro is used to classify the strategy of certain hedge funds -- those that take large leveraged positions in financial derivatives, on the basis of forecasts about interest rate trends, movements in the general flow of funds, political changes, government policies, inter-government relations, and other broad systemic factors.