These old-fashioned hedge funds are cashing in like it’s the GFC
Global stocks have dropped 20 per cent this year, while bonds have delivered their biggest declines in decades. But hedge funds that can bet against bonds or treat currencies as an asset class have leapt ahead.
London | Hedge funds trading bonds and currencies are on track for their best year since the global financial crisis, boosted by the steep interest rate rises that have inflicted heavy losses on equity specialists and mainstream investors.
So-called macro hedge funds, made famous by the likes of George Soros and Louis Bacon, endured a barren period when markets were becalmed by trillions of dollars of central bank bond buying after 2008. But this year they have thrived thanks to seismic moves in global bond markets and a bull run in the dollar as the US Federal Reserve and other central banks battle soaring inflation.
