Hedge Fund Investing: A Practical Approach to Understanding Investor Motivation, Manager Profits, and Fund Performance

Summary

This chapter was intended to provide readers with an understanding of the basics of global macro investing. The style is one of the oldest yet still one of the most popular today. The main characteristic of the style, whether directional or systematic, is its focus on macroeconomic drivers, trends, liquid markets, and the use of futures, currencies, and derivatives to generate leverage. The style is very different from other styles that are based on bottom-up analysis of specific securities or situations such as long and short equity, fixed-income relative value, convertibles, or event-driven styles. Global macro funds generally offer a fairly high level of transparency and liquidity to their investors.